Single Source Blog - Surety News - Page 8

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 Federal Motor Carrier Safety Administration (FMCSA) issues freight broker operating authorities (the freight broker equivalent of a license) through a registration process.  All freight brokers are registered at the federal level. Learn more about the role freight brokers play in moving cargo in the United States and what it takes to become one.

What Are the Steps in the Licensing Process?

While freight broker operating authorities are issued at the federal level, you will need to establish and register your business at the state level if you plan to operate your own brokerage firm. In North Carolina, that means registering your new business with the Secretary of State and obtaining a sales and use tax number form the North Carolina Department of Revenue.

Whether you plan to operate your own brokerage or work as a freight broker in someone else�s firm, there are a few steps you�ll need to take in preparation for applying for a freight broker operating authority:

• Decide which type of operating authority you will be registering for��Broker of Household Goods� or �Broker of Property (except Household Goods),� or perhaps both.
• Identify a process agent (someone who can accept legal service on your behalf if you�re sued) in every state where you will have an office or write contracts. Or, you can identify a blanket process service company that can represent you in any state.
• List all of your process agents on a single Form BOC-3�(Designation of Process Agents) to file with FMCSA. (If you opt for a blanket process agent, the company can do that for you.)
• Obtain a $75,000 freight broker bond (Form BMC-84) from an FMCSA-approved surety bond company, with FMCSA as the bond’s “obligee.” Alternatively, you could set up a Trust Fund Agreement (Form BMC-85) instead of purchasing a surety bond, but that would mean tying up much more money than it will cost you to furnish FMCSA with a surety bond.

You�ll apply for your operating authority through the Unified Registration System (URS). Create an URS account, complete the online application in its entirety, upload the required documents, and pay the registration fee (currently $300). As soon as your payment is processed, URS will give you your MC number (MCN), which is proof of your operating authority, although the operating authority documents won’t arrive in the mail for about 10 business days.

Why Is a Freight Broker Surety Bond Required?

A BMC-84 bond is a freight broker�s guarantee to operate in full compliance with FMCSA regulations. Any violation, such as failing to pay a shipper or carrier, that causes FMCSA or a shipper or carrier to experience a financial loss, can result in the injured party filing a claim against the bond. As the bond�s �principal,� you are legally obligated to pay all valid claims.

How Are Freight Broker Bond Claims Paid?

There is a third party to a freight broker bond in addition to the principal and the obligee, and that�s the �surety��the bond�s guarantor. The terms of the legally binding surety bond agreement obligate the principal to pay all valid claims, but that payment is guaranteed by the surety. Therefore, the surety will pay a valid claim initially, on the principal�s behalf, and be reimbursed by the principal. Not repaying the claim amount can result in the surety taking legal action against the principal.

What Does It Cost?

The annual premium for a freight broker bond is calculated by multiplying the $75,000 bond amount by the premium rate established by the surety through underwriting. The primary underwriting consideration is the risk that the principal won�t repay the surety as required. That risk is measured by the principal�s personal credit score�the higher the score, the lower the risk to the surety.

The premium rate for someone with good credit should be in the range of two to four percent. An applicant with a lower credit score 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?

Every freight broker operating in the United States must obtain a freight broker operating authority by registering with the Federal Motor Carrier Safety Administration (FMCSA). Learn more about the role freight brokers play in moving cargo from one point to another, and what it takes to become a freight broker.

What Are the Steps in the Licensing Process?

When you�re ready to apply for your operating authority, you�ll do it through the Unified Registration System (URS). But there are several things you’ll need to do first in preparation for applying.

1. First, if you plan to establish your own freight brokerage, you will need to decide on an appropriate legal structure, create a business entity, and register it online through Maryland�s Business Express
2. Decide whether you will be applying for an operating authority as a �Broker of Household Goods� or �Broker of Property (except Household Goods),� or both.
3. Decide whether you will select a process agent in every state where you will have an office or write contracts, or instead opt for a blanket process service company that has agents in all states. Complete a single Form BOC-3�(Designation of Process Agents) listing all of your process agents and file it with FMCSA or, if you decide to use a blanket process service, you can ask the company to do that for you.
4. Purchase a $75,000 freight broker bond (Form BMC-84) from an FMCSA-approved company, with FMCSA as the bond’s “obligee.” You have the option of establishing a Trust Fund Agreement (Form BMC-85) instead of purchasing a surety bond, but most freight brokers don’t want to tie up $75,000 when the annual premium for a freight broker bond is much less.

Once you�re ready to apply for your operating authority, you�ll need to create an URS account, complete the online application, upload the required documents, and pay the registration fee, which currently is $300. URS will then automatically generate your motor carrier number (MCN), which identifies you as a registered freight broker. You should receive your operating authority documents in the mail in no more than 10 business days.

Why Is a Freight Broker Surety Bond Required?

A BMC-84 freight broker bond is your guarantee to FMCSA that you will do business in compliance with FMCSA regulations governing freight brokerage activities. A violation that causes a monetary loss to FMCSA or a shipper or carrier can result in the injured party filing a claim against your bond. The bond�s guarantor, known as the �surety,� will determine whether the claim is valid, and if it is, the legal obligation to pay it rests entirely with you, the bond�s �principal.�

How Are Freight Broker Bond Claims Paid?

Although it may seem a little odd, the surety will pay the claimant directly, and then collect reimbursement from you. As the bond�s guarantor, the surety has a responsibility to resolve the claim swiftly. But the obligation to compensate the injured party is yours and yours alone, so by law you must repay the surety for any claim paid on your behalf or risk being sued by the surety.

What Does It Cost?

The annual premium for a freight broker bond is a small percentage of the $75,000 required bond amount. That percentage, the premium rate, is set by the surety through an underwriting assessment of the risk that paying claims on your behalf entails. That risk is measured by your personal credit score.

If your credit score is good, the risk that you won�t reimburse the surety is assumed to be low, and your premium rate should be in the range of two to four percent. But if your credit score is on the low side, the risk to the surety is higher and your premium rate will be higher as well.

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?

To operate legally in the United States, all freight brokers must be registered by the Federal Motor Carrier Safety Administration (FMCSA). The result of that process is the issuance of a freight broker operating authority, which functions as a license. Learn more about what freight brokers do to facilitate the movement of cargo and what is involved in becoming a freight broker.

What Are the Steps in the Licensing Process?

Much of the work that goes into becoming a freight broker occurs well before submitting an application for an operating authority. Tasks you�ll need to accomplish in preparing to apply include:

1. Establishing a legal business entity if you plan to operate your own freight brokerage firm. This involves choosing an appropriate legal structure and registering your business with the Mississippi Secretary of State.
2. Choosing which type of operating authority to apply or��Broker of Household Goods� or �Broker of Property (except Household Goods),� or both.
3. Selecting a process agent in every state where you will have an office or write contracts or a blanket process service company that has agents in all states. You must list all of your process agents on a single Form BOC-3�(Designation of Process Agents)and file it with FMCSA.(If you designate a blanket process service firm, the company can do that for you.)
4. Purchasing a $75,000 freight broker bond (Form BMC-84) that designates CSA as the bond’s “obligee” requiring the bond. There is an option to set up a Trust Fund Agreement (Form BMC-85) instead of buying a surety bond, but most applicants prefer not to tie up $75,000 when they can purchase a surety bond for far less.

When you apply for your operating authority, you�ll do so using the Unified Registration System (URS). The system will guide you through creating an URS account, completing the online application, uploading the necessary documents, and paying the $300 registration fee. As soon as you pay the fee, URS will give you your MC number (MCN), as proof of your registration. You can expect your operating authority documents to arrive in the mail within 10 business days.

Why Is a Freight Broker Surety Bond Required?

In purchasing a BMC-84 freight broker you agree to comply with FMCSA regulations governing freight brokers. Any violation that causes FMCSA or a shipper or carrier financial harm can result in the inured party filing a claim against the bond.� If this occurs, as the bond�s �principal,� you are legally obligated to pay the claim if the bond�s guarantor, the �surety,� finds it to be legitimate.

How Are Freight Broker Bond Claims Paid?

As the bond�s principal, you are solely responsible for paying any valid claim. However, because the surety has guaranteed your payment, the surety will pay a claim initially and then be reimbursed by you. If you don�t repay the surety on schedule, you can 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 broker bonds are subject to underwriting to determine the premium rate you will pay. The primary underwriting concern is the risk of the surety not being reimbursed readily for claims paid on your behalf. �That risk is measured largely on the basis of your personal credit score. With a good credit score, your premium rate should be in the range of 2% to 4%. If you have a lower credit score, your premium rate will be higher because the risk to the surety will be considered greater.

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?

The Federal Motor Carrier Safety Administration (FMCSA) registers all U.S. freight brokers, issuing them a freight broker operating authority, which is the equivalent of a license. Learn more about what freight brokers do to keep cargo moving throughout the country and what it takes to become one.

What Are the Steps in the Licensing Process?

Most of the effort required to get a freight broker operating authority goes into preparing to apply for one. You�ll need to accomplish all of the following before you sit down to complete your application.

1. If you will be working as a freight broker in a firm owned by someone else, you can skip to Step 2. If you will be launching your own freight brokerage, you must first set up a legal business entity, register it with The Michigan Secretary of State and obtain a Nevada state business license.
2. Make a decision as to whether you want to operate as a �Broker of Household Goods� or �Broker of Property (except Household Goods),� or perhaps as both.
3. You will need to name a process agent in every state where you will have an office or write contracts. (A process agent is someone who will accept legal service on your behalf if you are sued.) Or you may choose to be represented by a blanket process service company that has agents in all states. Either you or your blanket process company, if you go that route, must complete a single Form BOC-3�(Designation of Process Agents)and file it with FMCSA.
4. Obtain a $75,000 freight broker bond (Form BMC-84) with FMCSA listed as the bond’s “obligee.” Alternatively, you could establish a Trust Fund Agreement (Form BMC-85), but that would require you to tie up $75,000 in cash, which is unnecessary.

When you�ve done all of the above, you will have what you need to apply for registration through the Unified Registration System (URS). You’ll set up an URS account, complete the online application, upload all required documents, and pay the registration fee (currently $300). At that point, URS will generate your MC number (MCN), which is your proof of registration. You should receive your operating authority documents by mail within 10 business days.

Why Is a Freight Broker Surety Bond Required?

When you purchase a BMC-84 freight broker bond, you guarantee that you will comply with all applicable FMCSA regulations. Any act of noncompliance that causes financial harm to FMCSA, a shipper, or a carrier can result in a claim being filed against your bond�a claim that you, as the bond�s �principal,� are legally obligated to pay.

How Are Freight Broker Bond Claims Paid?

In addition to FMCSA as the obligee and you as the principal, there is a third party to the legally binding freight broker bond contract: �the bond�s guarantor, referred to as the �surety.� While you are legally obligated to pay all valid claims, the surety has guaranteed their payment. Because of that guarantee, the surety will pay a claim up front, but you must then reimburse the surety for the claim amount. If you don�t, the surety can take legal action against you to secure repayment.

What Does It Cost?

The annual premium for a BMC-84 bond is calculated by multiplying the $75,000 bond amount by the premium rate assigned by the surety through underwriting. That premium rate will be based largely on your personal credit score, which is a good measure of the risk that you might not repay the surety for claims paid on your behalf.

If your credit is good, the risk to the surety is low, and your premium rate should be in the range of two to four percent. A lower credit score will result in 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�registered, actually�by the Federal Motor Carrier Safety Administration (FMCSA). The result of that registration process is a freight broker operating authority. Learn more about the role freight brokers play in the movement of cargo and what it takes to become one.

What Are the Steps in the Licensing Process?

Before applying for a freight broker operating authority, there are some decisions to be made and some tasks to be accomplished.

1. If you will be opening your own firm rather than working in someone else�s freight brokerage, you will need to establish a legal business entity and register it with your county clerk and the Michigan Department of Treasury.
2. Decide whether you will be registering as a �Broker of Household Goods� or �Broker of Property (except Household Goods),� or perhaps both.
3. Choose a process agent that can accept legal service on your behalf. You will need to choose one in every state where you will have an office or write contracts. You may also opt for a blanket process service company that has agents in all states. Complete a single Form BOC-3�(Designation of Process Agents) listing all of your process agents and file it with FMCSA. If you choose a blanket process agent, the company can do that for you.
4. Purchase a $75,000 freight broker bond (Form BMC-84) from a company approved by FMCSA, with FMCSA as the bond’s “obligee.” You have the option of establishing a Trust Fund Agreement (Form BMC-85) instead of purchasing a surety bond, but you probably won’t want to tie up $75,000 in cash when you don’t have to.

When you�re ready to apply for your operating authority, you�ll do it through the Unified Registration System (URS). Create an account on URS, complete the online application, upload the supporting documents, and pay the $300 registration fee.  As soon as your payment goes through, URS will generate your MC number (MCN), which is the evidence of your successful registration. Your operating authority documents will arrive in the mail within 10 business days.

Why Is a Freight Broker Surety Bond Required?

A BMC-84 freight broker is your pledge to abide by FMCSA regulations. If you fail to do so, and that failure causes FMCSA or a shipper or carrier to incur a financial loss, as the bond�s �principal,� you are legally obligated to compensate them.

How Are Freight Broker Bond Claims Paid?

The FMCSA acts as the �obligee,� you act as the bond�s �principal,� and the third party to your freight broker bond is the bond�s guarantor, known as the �surety.� �Although the principal is legally obligated to pay all valid claims, the surety has guaranteed that they will be paid. Therefore, the surety will pay a claim initially and then be repaid by the principal. The surety can take legal action against the principal if not repaid on schedule.

What Does It Cost?

The surety�s main underwriting concern is being repaid for claims paid on the principal�s behalf. If your personal credit score is good, the surety will consider you a low risk and assign you a premium rate that is in the range of two to four percent of the $75,000 bond amount. A principal with lesser credit is a greater risk to the surety and will pay a higher premium rate.

Work with our surety bond professionals to get the freight broker (BMC-84) bond you need at a competitive rate.

Learn how to become licensed as a freight broker in Ohio, 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 in the United States are registered, not licensed. The result of that process is a freight broker that results in the issuance of a freight broker operating authority by the Federal Motor Carrier Safety Administration (FMCSA). Learn more about what being a freight broker entails and what is involved in becoming one.

What Are the Steps in the Licensing Process?

There are a few important tasks you must take care of before you begin your application for a freight broker operating authority.

1. If you will be launching your own firm, you must set up a legal business entity and register it with the Ohio Secretary of State and the Ohio Department of Taxation.
2. Decide which of the two types of operating authority you will apply for��Broker of Household Goods� or �Broker of Property (except Household Goods).� You may apply for both, if you prefer.
3. Select a process agent in every state where you will maintain an office or write contracts. A process agent is someone authorized to accept legal service on your behalf if you are sued by a shipper or carrier. You have the option of using a blanket process service company that can represent you in any state. Either you or your selected blanket company must complete a single Form BOC-3�(Designation of Process Agents) lifting all of your process agents and file it with FMCSA.
4. Purchase a freight broker bond (Form BMC-84) in the amount of $75,000, with FMCSA as the “obligee.” This is much more popular with freight brokers than the other option, which is to establish a Trust Fund Agreement (Form BMC-85), which requires tying up $75,000 in cash.

When you�ve completed all of the above off, you�re ready to create an account on the Unified Registration System (URS). You’ll use this account to complete an online application, upload supporting documents, and pay the registration fee (currently $300). Once your payment has been processed, the system will generate your MC number (MCN). It will take about 10 business days for your operating authority documents arrive in the mail.

Why Is a Freight Broker Surety Bond Required?

A BMC-84 freight broker bond is your pledge to do business in accordance with all applicable FMCSA regulations and pay any resulting claims if you don�t. Any noncompliant action on your part that is verified to have caused FMCSA or a shipper or carrier to experience a monetary loss is grounds for a claim against your bond�a claim that you, as the bond�s �principal,� are legally obligated to pay.

How Are Freight Broker Bond Claims Paid?

In addition to FMCSA as the obligee, and the freight broker as the principal, there is a third party to every freight broker bond�the bond�s guarantor, known as the �surety.� Although the principal is legally obligated to pay all legitimate claims, the surety guarantees their payment. Consequently, the usual practice is for the surety to pay a claim initially and then be reimbursed for that amount by the principal. Not being reimbursed can result in the surety taking legal action against the principal to recover the amount of the claim.

What Does It Cost?

The annual premium rate for a freight broker bond is determined by the surety through an underwriting assessment of the risk that the principal may not repay the surety for claims paid on the principal�s behalf. If the principal�s personal credit score is high, the risk to the surety is low, and the premium rate should be no more than 2% to 4%. A principal with a low credit score presents a higher level of risk 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?

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.