Single Source Blog - Surety News - Page 12

Learn how to become licensed as a freight broker, and speak with an Single Source Insurance agent today about purchasing the BMC-84 bond you�ll need to operate as a freight broker.

Who Needs a Freight Broker License?

The better question is, �Who needs a freight broker operating authority?� That�s the official name for the result of the registration process through which the Federal Motor Carrier Safety Administration (FMCSA) must approve anyone who wants to work as a freight broker in the United States.  Learn more about what freight brokers do and how to become one.

What Are the Steps in the Licensing Process?

Before you can complete your online application for a freight broker operating authority, you�ll need to accomplish the following:

1. If you will be setting up your own freight brokerage firm, you must first establish a legal business entity and register it with the state through Virginia Business One Stop.
2. Decide whether to apply for an operating authority as a Broker of Household Goods or as a Broker of Property (except Household Goods), or as both.
3. Choose the process agent(s) who can accept legal service on your behalf if you are sued. That can be an individual process agent in every state where you will maintain an office or write contracts, or a blanket process service company that has agents in all states. In either case, you (or a blanket agency) must fill out a Form BOC-3�(Designation of Process Agents) and file it with FMCSA.
4. Purchase a $75,000 freight broker bond (Form BMC-84)with FMCSA as the “obligee.” While you have the option of setting up a $75,000 Trust Fund Agreement (Form BMC-85), most freight brokers don’t want to tie up that much cash.

When you�ve accomplished all necessary preparatory tasks, go ahead and create an account on the Unified Registration System (URS), complete the online application, upload required supporting documents, and pay the $300 registration fee. The system will generate your MC number (MCN) at that point. Your MCN is the official proof of your operating authority; your operating authority documents should arrive in the mail inten business days or less.

Why Is a Freight Broker Surety Bond Required?

A BMC-84 freight broker bond is your guarantee to do business in full compliance with FMCSA regulations. It legally obligates you to pay all valid claims filed by FMCSA or by a shipper or carrier for monetary damages caused by any noncompliant action on your part.

How Are Freight Broker Bond Claims Paid?

There are three parties to every freight broker bond�FMCSA as the �obligee,� the freight broker as the �principal,� and the bond�s guarantor as the �surety.� Although the principal bears the legal obligation to pay all legitimate claims, the surety guarantees their payment and therefore will pay them initially. But that does not eliminate the principal�s obligation, so the principal must then reimburse the surety. If not repaid within an acceptable timeframe, the surety can take legal action against the principal.

What Does It Cost?

With a high personal credit score, the risk of the surety not being reimbursed by the principal is deemed low, so the bond premium rate should be in the range of two to four percent. Someone with a lower credit score poses a greater risk to the surety and will pay a higher premium rate.

Our surety bond professionals will get you the freight broker (BMC-84) bond you need at a competitive rate.

Learn how to become licensed as a freight broker, and speak with an Single Source Insurance agent today about purchasing the BMC-84 bond you�ll need to operate as a freight broker.

Who Needs a Freight Broker License?

Technically, freight brokers are registered, not licensed, and the result is an �operating authority,� which is the equivalent of a license. Freight broker operating authorities are issued by the Federal Motor Carrier Safety Administration (FMCSA). You must obtain your operating authority before you can work as a freight broker anywhere in the United States.

What Are the Steps in the Licensing Process?

There are certain steps you must take before you even sign on to the Unified Registration System (URS) to begin your online application.

1. If you will be opening your own freight brokerage firm, you will need to establish a legal business entity (e.g., sole proprietorship, partnership, LLC, corporation) and register it properly with the Indiana Secretary of State and the Indiana Department of Revenue. This is not necessary, of course, if you will be working in a freight brokerage owned by someone else.
2. Decide which type of operating authority you will be applying for��Broker of Household Goods� or �Broker of Property (except Household Goods).� You also have the option of applying for both.
3. Designate a process agent, a person who will accept legal service on your behalf, in every state where you will maintain an office and/or write contracts. There are blanket process agent companies that have agents in every state who can accept legal service for you. Fill out a single Form BOC-3�(Designation of Process Agents) that lists all of your process agents for submission to FMCSA. A blanket process agent firm can prepare and file a BOC-3 for you.
4. Purchase a freight broker bond (Form BMC-94) in the amount of $75,000. You also have the option of setting up a Trust Fund Agreement (Form BMC-85), but most freight brokers prefer not to tie up that much cash.

When you have accomplished all of these steps, you�re ready to complete and submit your application through URS and pay the $300 registration fee. URS will then assign you an MC number (MCN) that is your proof of registration. You should get your operating authority documents in the mail within 10 business days.

Why Is a Freight Broker Surety Bond Required?

There are two main reasons behind the requirement for a freight broker bond:

• It serves as a freight broker�s guarantee to comply with applicable FMCSA regulations.
• It ensures compensation of FMCSA, shippers, carriers, and others who have experienced a financial loss because of the unlawful or unethical business conduct of a freight broker, known in the lingo of surety bonds as the bond�s �principal.�

The two other parties to the legally binding surety bond agreement are FMCSA (the �obligee� requiring the bond), and the company guaranteeing the bond (the bond�s �surety �).� Both the obligee and the surety are indemnified against any legal liability for claims. The legal obligation to pay valid claims rests entirely with the principal.

How Are Freight Broker Bond Claims Paid?

Because the surety has guaranteed the payment of claims, it�s normal practice for the surety to pay a claim initially and be repaid by the principal. If the surety is not repaid, the principal may very well end up the losing defendant in a case brought by the surety and be ordered to repay the surety the claim amount and cover legal fees and court costs as well.

What Does It Cost?

The annual premium for a BMC-84 freight broker bond is a small percentage of the $75,000 bond amount. The surety assigns every bond applicant a premium rate based on the perceived risk of not being repaid for claims paid on the principal�s behalf. The principal�s personal credit score serves as a reliable measure of that risk.

For applicants with good credit, the average premium rate is between two and four percent.� An applicant with poor credit presents a higher risk to the surety and will be assigned a higher premium rate.

Our surety bond professionals will get you the freight broker (BMC-84) bond you need at a competitive rate.

Learn how to become licensed as a freight broker, and speak with an Single Source Insurance agent today about purchasing the BMC-84 bond you�ll need to operate as a freight broker.

Who Needs a Freight Broker License?

Before you can work as a freight broker in Illinois, or in any other state, for that matter, you�ll need to obtain an �operating authority� from the Federal Motor Carrier Safety Administration (FMCSA). If you want to learn more about being a freight broker, click here.

What Are the Steps in the Licensing Process?

There are a few things you�ll need to do in preparation for applying for your operating authority. These include:

• Deciding whether you will create a legal business entity and establish your own brokerage firm, or take a job as a freight broker in a firm owned by someone else. If you choose to become an entrepreneur, you�ll need to form a new business and register it properly with both the Illinois Secretary of State and the Illinois Department of Revenue.
• Deciding whether you will apply for your operating authority as a �Broker of Household Goods� or as a �Broker of Property (except Household Goods)� or both.
• Selecting a process agent in every state where you will maintain an office or write contracts. You might want to select a blanket process agent company that can accept legal service on your behalf in any state. If you opt for a blanket agent, they can fill out the required Form BOC-3�(Designation of Process Agents)and submit it to FMCSA on your behalf. If you designate individual process agents in multiple states, you’ll need to list all of them on a single BOC-3 and submit it with your application.
• Purchasing a freight broker bond (Form BMC-84). All freight broker bonds are in the amount of $75,000. Alternatively, you can provide FMCSA with a Trust Fund Agreement (Form BMC-85), but that requires tying up $75,000 in much cash.

Once you have accomplished all of the above, you�re ready to set up an account and sign in to the Unified Registration System (URS) and submit your application and supporting documents and pay the registration fee (currently $300). You’ll get your MC number (known as the MCN) from URS immediately. Your operating authority documents should arrive in the mail within 10 business days.

Why Is a Freight Broker Surety Bond Required?

A BMC-84 surety bond is a freight broker�s pledge to operate in accordance with FMCSA regulations and to compensate FMCSA (the bond�s �obligee�), shippers, carriers, and others incurring� monetary loss because the freight broker (the bond�s �principal�) violated of any of those regulations.

How Are Freight Broker Bond Claims Paid?

The third party to a freight broker bond is the company (the �surety�) guaranteeing the payment of claims, though the legal obligation to satisfy valid claims belongs solely to the principal. As the guarantor, the surety normally pays a claim initially and is subsequently reimbursed by the principal. If not reimbursed on schedule, the surety can take legal action against the principal.

What Does It Cost?

You�ll pay an annual premium for a freight broker bond that is a small percentage of the $75,000 bond amount. The surety assigns a premium rate to each bond applicant based largely on his or her personal credit score. With a high credit score, the underwriting assumption is that the risk of the surety not being repaid by the principal is low, which results in a premium rate that typically is in the range of two to four percent. A low credit score is indicative of a higher risk to the surety, which warrants a higher premium rate.

Our surety bond professionals will get you the freight broker (BMC-84) bond you need at a competitive rate.

Learn how to become licensed as a freight broker, and speak with an Single Source Insurance agent today about purchasing the BMC-84 bond you�ll need to operate as a freight broker.

Who Needs a Freight Broker License?

Freight brokers go through a federal registration process that results in the issuance of a freight broker operating authority by the Federal Motor Carrier Safety Administration (FMCSA). Learn more about what freight brokers do and what it takes to become one.

What Are the Steps in the Licensing Process?

This is what you�ll need to do in preparation for applying for your operating authority:

1. If you plan to open your own freight brokerage firm, you must set up a legal business entity and register it with the Arkansas Secretary of State and the Arkansas Department of Finance and Administration.
2. Decide which type of operating authority you will apply for��Broker of Household Goods,� �Broker of Property (except Household Goods),� or both.
3. Choose a process agent in every state where you will maintain an office or write contracts, or select a blanket process service company that can accept legal service on your behalf in any state. In either case, you (or your designated blanket agency) must complete a Form BOC-3�(Designation of Process Agents) and file it with FMCSA.
4. Buy a $75,000 freight broker bond (Form BMC-84) with FMCSA as the �obligee.� Alternatively, you can establish a Trust Fund Agreement (Form BMC-85), though few freight brokers are willing to tie up $75,000 in cash.

Now you�re ready to create an account on the Unified Registration System (URS) and complete the online application, upload required documents, and pay the $300 registration fee. When your payment has been accepted, URS will generate your MC number (MCN). You can use your MCN as proof of your successful registration until your operating authority documents arrive in the mail.

Why Is a Freight Broker Surety Bond Required?

In purchasing a BMC-84 freight broker you re guaranteeing that you will operate in full compliance with FMCSA regulations and that you will pay all valid claims resulting from any noncompliant action on your part that causes FMCSA or a shipper or carrier to incur monetary a financial loss.

How Are Freight Broker Bond Claims Paid?

In addition to FMCSA as the obligee, there are two other parties to a freight broker bond. The freight broker is known as the �principal,� and the bond�s guarantor is the �surety.� The terms of the surety bond agreement legally obligate the principal to pay all claims the surety finds to be valid. But as the guarantor, the surety typically will pay a claim up front and then be reimbursed by the principal. The surety can sue the principal if not reimbursed for the claim amount.

What Does It Cost?

If your personal credit score is good, you should pay an annual freight broker bond premium that is somewhere between two and four percent of the $75,000 bond amount. That�s because the risk that you will not repay the surety for claims paid on your behalf is considered to be low. A principal with lesser credit presents a greater risk to the surety and will pay a higher premium rate.

Our surety bond professionals will get you the freight broker (BMC-84) bond you need at a competitive rate.

Learn how to become licensed as a freight broker, and speak with an Single Source Insurance agent today about purchasing the BMC-84 bond you�ll need to operate as a freight broker.

Who Needs a Freight Broker License?

Obtaining an �operating authority� (which serves the same purpose as a license) is a prerequisite for operating as a freight broker in the United States. This operating authority is issued by the Federal Motor Carrier Safety Administration (FMCSA).

What Are the Steps in the Licensing Process?

All applications for a freight broker operating authority are submitted and processed through the Unified Registration System (URS). If you plan to open your own brokerage, you�ll need to establish a legal business entity and register it with the Arizona Secretary of State and the Arizona Department of Revenue. Whether you are going to launch your own firm or work as a freight broker for someone else�s brokerage, you�ll need to decide which type of operating authority to apply for��Broker of Household Goods,� �Broker of Property (except Household Goods),� or apply for both.

Every freight broker must also designate a process agent in every state where you will have an office or write contracts. Or you may choose a blanket process agent company that has agents in every state. All process agents must be listed on a single Form BOC-3�(Designation of Process Agents)that will be filed with FMCSA. If you opt for a blanket process agent company, they can prepare and file the form for you.

Additionally, every applicant for an operating authority must purchase a $75,000 freight broker bond (Form BMC-84) or provide FMCSA with a Trust Fund Agreement (Form BMC-85). The bond is the more popular option because it does not require tying up $75,000 in cash or credit.

Applications for a freight broker authority are entered into and submitted through the Unified Registration System (URS). As soon as you have completed your application and have paid the $300 registration fee, the system will automatically generate your MC number (MCN), but it takes about ten business days for your operating authority documents to arrive in the mail.

Why Is a Freight Broker Surety Bond Required?

A BMC-84 bond guarantees a freight broker�s compliance with all FMCSA regulations and obligates the freight broker (the bond�s �principal�) to pay all valid claim against the bond resulting from their noncompliant behaviors.

The bond also indemnifies FMCSA (the bond�s �obligee,�) against liability for any financial harm experienced by the shippers and carriers that do business with a registered freight broker.

How Are Freight Broker Bond Claims Paid?

While the principal bears the full legal obligation to pay all valid claims, the bond�s guarantor (the �surety�) has guaranteed the payment of claims. So the surety typically pays a claim initially and then is reimbursed by the principal. If repayment is not forthcoming, the surety will take legal action against the principal to recover the claim amount plus legal fees.

What Does It Cost?

To purchase a BMC-84 freight broker bond you�ll pay an annual premium that is a small percentage of the $75,000 bond amount. That premium rate is set by the surety through an underwriting process that focuses on the risk involved in paying claims on behalf of the principal and waiting to be reimbursed. The average premium rate for applicants with good credit, and therefore considered low risk, is in the range of 2% to 4%. Someone with lesser credit presents a greater risk to the surety and will be assigned a higher premium rate.

Our surety bond professionals will get you the freight broker (BMC-84) bond you need at a competitive rate.

Learn how to become licensed as a freight broker, and speak with an Single Source Insurance agent today about purchasing the BMC-84 bond you�ll need to operate as a freight broker.

Who Needs a Freight Broker License?

Anyone who will be working as a freight broker in Alabama will need to apply for and receive an �operating authority� from the Federal Motor Carrier Safety Administration (FMCSA). Click here to learn what freight brokers do and the procedure or becoming a freight broker anywhere in the country.

What Are the Steps in the Licensing Process?

Before you apply for your freight broker operating authority, you will need to decide whether you will be opening your own brokerage or working as a freight broker in a firm owned by someone else.

If you will be establishing your own freight brokerage, you�ll need to create a legal business entity and register it with the IRS, the Alabama Department of Revenue and the Alabama Secretary of State.

All prospective freight brokers must decide which of the two types of freight broker operating authority they will apply for: �Broker of Household Goods� or �Broker of Property (except Household Goods),� or both. They must also select a process agent in every state where they will have an office or write contracts. Alternatively, they may choose a blanket process agent company that can represent them in any state. If you choose a blanket agent, they can complete the required Form BOC-3�(Designation of Process Agents) for you and file it with FMCSA on your behalf. Otherwise, you’ll need to list all of your process agents on a single form and submit it with your application.

All freight brokers also are required to purchase a $75,000 freight broker bond (Form BMC-84). You have the option of providing FMCSA with a Trust Fund Agreement (Form BMC-85) instead of a bond, but most applicants don�t want to tie up that much cash.

When you have everything you need, sign in to the Unified Registration System (URS), follow the instructions for submitting your application, and pay the registration fee (currently $300). The system will generate your MC number (MCN) immediately as evidence of your operating authority. The operating authority documents will arrive in the mail within a few days.

Why Is a Freight Broker Surety Bond Required?

A BMC-84 surety bond is your guarantee to do business in compliance with FMCSA regulations and to pay all valid claims filed by shippers, carriers, and others financially harmed as a result of your violation of any of those regulations.

How Are Freight Broker Bond Claims Paid?

There are three parties to a BMC-84 freight broker bond, which is a legally binding contract among them. �FMCSA is the �obligee� requiring the bond. The freight broker is the �principal,� who is legally obligated to pay all valid claims. The bond�s guarantor is the �surety� and has guaranteed the payment of claims. Therefore, the surety will pay a claim initially and be reimbursed later by the principal. Failing to reimburse the surety can result in legal action against the principal.

What Does It Cost?

The annual premium for a BMC-84 freight broker bond is a small percentage of the $75,000 bond amount. That percentage is the premium rate, which the surety sets through an underwriting evaluation of the risk of not being repaid by the principal for claims paid on the principal�s behalf.

The primary consideration is the principal�s personal credit score. For the average bond applicant with good credit, the premium rate should be between 2% and 4%. A principal with a low credit score could be a greater risk to the surety and will pay a higher premium rate.

Our surety bond professionals will get you the freight broker (BMC-84) bond you need at a competitive rate.

Learn how to become licensed as a freight broker, and speak with an Single Source Insurance agent today about purchasing the BMC-84 bond you�ll need to operate as a freight broker.

Who Needs a Freight Broker License?

Freight brokers are licensed at the federal level, but the process is referred to as registration rather than licensing and the end result is an operating authority from the Federal Motor Carrier Safety Administration (FMCSA). Learn more about what freight brokers do and what it takes to become one.

What Are the Steps in the Licensing Process?

Here�s what you will need to do in preparation for applying for a freight broker operating authority:

1. Unless you plan to open your own freight brokerage, skip to #3 below. If you will be starting your own brokerage, you�ll first need to form a legal business entity and, unless it will be a sole proprietorship, register it with the California Secretary of State.
2. For taxation purposes, register your brokerage with the�IRSand the California Franchise Tax Board.
3. Decide which type of freight broker operating authority you will apply for: �Broker of Household Goods� or �Broker of Property (except Household Goods).� Many freight brokers apply for both.
4. You must designate a process agent in every state where you will have an office or write contracts. You have the option of choosing a blanket process agent company that can represent you in every state. List all of your designated process agents on a single Form BOC-3�(Designation of Process Agents) that you will submit to FMCSA. A blanket process agent company can complete and file the form for you.
5. Purchase a $75,000 freight broker bond (Form BMC-84) or set up a Trust Fund Agreement (Form BMC-85). The bond is by far the more popular option with freight brokers because it doesn�t require tying up $75,000 that could otherwise be used as operating capital.

When you are ready, go ahead and complete the online application through the Unified Registration System (URS). At the end of the process, after you have paid the $300 registration fee, the system will generate your MC number (MCN), which is the evidence of your operating authority. Within 10 business days, you will receive the operating authority documents in the mail.

Why Is a Freight Broker Surety Bond Required?

The BMC-84 surety bond you purchase serves as your guarantee to do business in full compliance with FMCSA regulations and to pay all valid claims resulting from any noncompliance on your part. It provides financial protection for FMCSA (the �obligee� requiring the bond) as well as for shippers and carriers using your services.

How Are Freight Broker Bond Claims Paid?

The BMC-84 bond required by FMCSA (the bond�s �obligee�) is a legally binding three-party contract with a freight broker (the bond�s �principal�) and the bond�s guarantor (the �surety�). That contract legally obligates the principal to pay all valid claims. The surety has guaranteed the payment of claims and typically will pay a claim initially and be reimbursed within a certain time period by the principal. A principal who fails to repay that debt is likely to be sued by the surety and end up paying court costs and legal fees on top of the claim amount.

What Does It Cost?

Freight brokers usually choose to provide FMCSA with a BMC-84 bond rather than a BMC-85 trust fund because a surety bond can be purchased for an annual premium that is only a small percentage of the $75,000 bond amount. The surety determines what that percentage (the premium rate) will be based on an assessment of the risk that paying claims on behalf of the principal entails. That risk is measured largely by the principal�s personal credit score.

For those with good credit, which suggests a low risk to the surety, the premium rate will most likely be in the 2% to 4% neighborhood. Those with poor credit will pay a substantially higher premium rate.

Request a�convenient online quote today, or call and speak with one of our surety bond experts who can answer your questions about freight broker BMC-84 surety bonds.

Learn how to become licensed as a freight broker, and speak with an Single Source Insurance agent today about purchasing the BMC-84 bond you�ll need to operate as a freight broker.

Who Needs a Freight Broker License?

If you�re planning to work as a freight broker anywhere in the United States, you�ll need to obtain an �operating authority� from the Federal Motor Carrier Safety Administration (FMCSA).Click here to learn more about what freight brokers do and what it takes to become one.

What Are the Steps in the Licensing Process?

There are a few things you�ll need to do before you apply for your freight broker operating authority:

1. If you plan to work for a freight brokerage operated by someone else, skip to #3 below. If you will be launching your own freight brokerage, you�ll need to establish a legal business entity and register it with the Florida Department of State
2. You�ll also need to register your brokerage with the�IRSand the Florida Department of Revenue.
3. Decide which of the two types of freight broker operating authority you will apply for: �Broker of Household Goods� or �Broker of Property (except Household Goods).� If you like, you can apply for both.
4. Freight brokers must designate a process agent in every state where they maintain an office or write contracts. Or, they may choose a blanket process agent company that has agents in every state. List all of your chosen process agents on a single Form BOC-3�(Designation of Process Agents) to be filed with FMCSA. If you decide to use a blanket company, they can complete and file the form for you.
5. The last task to complete before starting your application is to purchase a $75,000 freight broker bond (Form BMC-84). Alternatively, you can provide FMCSA with a Trust Fund Agreement (Form BMC-85) if you don�t have a problem tying up $75,000 in cash.

When you have accomplished all of the steps above, access the Unified Registration System (URS) and follow the instructions. After submitting your completed application, and paying the registration fee (currently $300), you’ll get your MC number (MCN) immediately. This number is the proof of your operating authority. You should receive the actual documents in the mail within 10 business days.

Why Is a Freight Broker Surety Bond Required?

When you purchase a BMC-84 surety bond you are pledging to operate in compliance with FMCSA regulations and agreeing to pay all valid claims filed against the bond by shippers, carriers, and any others experiencing a financial loss as a result of your noncompliance.

How Are Freight Broker Bond Claims Paid?

The BMC-84 freight broker bond required by FMCSA (the bond�s �obligee�) is a legally binding contract that obligates the freight broker (the �principal�) to pay all valid claims. However, the bond�s guarantor (the �surety�) has guaranteed the payment of claims and will pay a claim initially and be repaid later by the principal. The surety can take legal action against a principal who fails to reimburse the surety for paying a claim on the principal�s behalf.

What Does It Cost?

To purchase and/or renew a BMC-84 freight broker bond you will pay an annual premium that is a small percentage of the $75,000 bond amount. The surety determines what that percentage, the premium rate, through an underwriting assessment of the risk of not being reimbursed for a claim paid on the principal�s behalf.

That assessment is based largely on the principal�s personal credit score. The average bond applicant with good credit can expect a premium rate in the range of 2% to 4%. A lower credit score suggests that the applicant presents a greater risk to the surety and warrants a higher premium rate.

Request a�convenient online quote today, or call and speak with one of our surety bond experts who can answer your questions about freight broker BMC-84 surety bonds.

Learn how to become licensed as a freight broker, and speak with an Single Source Insurance agent today about purchasing the BMC-84 bond you�ll need to operate as a freight broker.

Who Needs a Freight Broker License?

Anyone planning to operate as a freight broker in the United States must first obtain an “operating authority” (which serves the same purpose as a license) from the Federal Motor Carrier Safety Administration (FMCSA).

What Are the Steps in the Licensing Process?

All freight broker operating authority applications are submitted and processed through the Unified Registration System (URS). There are a few things you�ll need to do in preparation for starting an application:

• If you plan to launch your own freight brokerage, you�ll first need to choose a legal structure, establish a legal business entity, and register it with the Texas�Secretary of State�s Office.
• You�ll also need to register your brokerage with the�IRSand the Texas�Comptroller of Public Accounts.
• There are two types of freight broker operating authority: �Broker of Household Goods� and �Broker of Property (except Household Goods).� Every freight broker needs to decide which one to apply for, or apply for both.
• You�ll also need to choose a process agent in every state where you will have an office or write contracts or a blanket process agent company that can represent you in any state. List all process agents on a single Form BOC-3�(Designation of Process Agents) to be filed with FMCSA. If you choose a blanket company, they can do this for you.
• Finally, purchase a $75,000 freight broker bond (Form BMC-84) or provide FMCSA with a Trust Fund Agreement (Form BMC-85), but that requires tying up $75,000 in cash or credit.

Now you�re ready to apply for a freight broker authority through the Unified Registration System (URS). Once you’ve competed the application, and have paid the registration fee (currently $300), URS will generate your MC number (MCN) immediately. Your operating authority documents should arrive by U.S. mail in about 10 business days.

Why Is a Freight Broker Surety Bond Required?

A BMC-84 freight broker bond provides financial protection for FMCSA, the bond�s �obligee,� and for the shippers and carriers that do business with you. The bond is a legally binding contract that guarantees your compliance with all FMCSA regulations. It also obligates you to pay all valid claims against the bond for damages caused by your noncompliance.

How Are Freight Broker Bond Claims Paid?

Although the freight broker (the �principal�) purchasing a BMC-84 bond is legally obligated to pay all valid claims, the bond�s guarantor (the �surety�) has guaranteed the payment of claims. So the usual practice is for the surety to pay a claim initially and then be reimbursed by the principal. Not repaying that debt can result in the surety suing the principal for the claim amount plus legal fees.

What Does It Cost?

The annual premium for a BMC-84 freight broker bond is a small percentage of the $75,000 bond amount. That percentage, the premium rate, is determined by the surety through an underwriting process. The surety�s main underwriting concern is the risk of not being repaid for claims paid on behalf of the principal. The best measure of that risk is the principal�s personal credit score.

The average premium rate for applicants with good credit is in the range of 2% to 4%. Someone with lesser credit presents a greater risk to the surety and will be assigned a higher premium rate.

Request a�convenient online quote today, or call and speak with one of our surety bond experts who can answer your questions about freight broker BMC-84 surety bonds.