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Freight
Broker Bond
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A freight broker surety bond – also referred to as a BMC 84 bond, a transportation broker bond, a property broker bond, a truck broker bond or an ICC broker bond) – are required to be filed with the Federal Motor Carrier Safety Administration (FMCSA) in order to register as a property broker. A BMC 85 trust fund agreement may be used instead of filing a BMC 84 Bond. A freight broker surety bond is for $75,000.
In addition to filing the appropriate form in the OP-1 series, all applicants for motor carrier, forwarder, and broker authorities must have specific insurance and legal process agent documents on file before the FMCSA will issue the actual authorities.
After obtaining their registration documents, applicants must register with every state through which they will travel as they conduct business. To begin this process, applicants should contact the state transportation body (usually located in the capital city) in which the business is headquartered. Copies of the FMCSA and appropriate state registration documents must be carried in each vehicle performing FMCSA authorized operations.This guarantees that the hiring organization doesn’t get held responsible for reimbursing subcontractors, suppliers and other laborers on the project. It also ensures that those same subcontractors, suppliers and laborers will not suffer financial loss should the general contractor default on the terms of his agreement.
These bonds are extremely complex. They can range anywhere from $935 to $15,000 depending on a number of factors. Navigating to the right solution requires expertise and our underwriters are the industry leader. To learn more, give us a call at (877) 762-4741. Some surety bonds are required by states for professionals and contractors to operate within the jurisdiction of the state. License and permit bonds are a good example of this kind of bonding, and they usually require bonded contractors to have gone through some level of training as assurance that they are qualified to offer professional services to consumers and hiring companies.
Once you meet the specific requirements to be bonded and licensed, your next step is to complete an application for a bond. There are several agencies across the country that specialize in bonds, so you should be able to find one that will serve you if you spend some time looking. Make sure that they can provide the bond that you will need for your business.
We can write them all - auto dealer, DMV, RV, motorcycle dealer, and used car dealer. Although there are some differences between these bonds, they all essentially serve the same purpose: to protect customers from fraud. If you as a dealer break your bond’s terms, the wronged party can make a claim against the bond to obtain compensation.
Freight broker bond terminology
A company that provides truck transportation. There are two types of motor carriers, private carriers, and for-hire carriers. To operate as an interstate motor carrier, either as a private or as a for-hire carrier, a company must register with FMCSA by filing a Form MCS-150.
A company that provides truck shipping of its own cargo, usually as a part of a business that produces, uses, sells and/or buys the cargo being hauled.
A company that provides truck shipping of cargo belonging to others and is paid for doing so. To operate as an interstate for-hire carrier, a company must also register with FMCSA by filling out a Form OP-1. There are two types of for-hire carriers, common carriers, and contract carriers. A for-hire carrier may be both a common and a contract carrier but must file separate registrations to obtain both licenses.
Before January 1, 1996, this was a company that provided for-hire truck transportation to the general public. The services offered and the prices charged were published in a public tariff and these were the only prices the common carrier could charge.
Before January 1, 1996, this was a company that provided for-hire truck transportation to specific, individual shippers based upon private contracts between the carrier and each shipper, stipulating the services offered and the prices charged to each.
The OP-1 form requires an applicant to designate whether it is registering as a “common carrier” or a “contract carrier.” The historical difference between these two types is reflected in the definitions immediately above. The ICC Termination Act of 1995 defines contract carriage as truck transportation provided under a contract, but, effective January 1, 1996, it no longer distinguishes between common or contract carriers. However, the Act specifically authorizes FMCSA to continue registering applicants as either common or contract carriers. The current principal distinction between the two types is that common carrier applicants must file proof of cargo insurance while contract carrier applicants are not required to do so.
A company that arranges for the truck transportation of cargo belonging to others, utilizing for-hire carriers to provide the actual truck transportation. The Forwarder does assume responsibility for the cargo from origin to destination and usually does take possession of the cargo at some point during the transportation. Forwarders typically assemble and consolidate less-than-truckload (LTL) shipments into truckload shipments at origin and disassemble and deliver LTL shipments at destination. Forwarders must register with FMCSA by filling out a Form OP-1 (FF).
Also, the company that arranges for the truck shipment of cargo belonging to others, utilizing for-hire carriers to provide the actual truck shipping. However, the Broker does not assume responsibility for the cargo and usually does not take possession of the cargo. Brokers must sign up with FMCSA by filing the Form OP-1.
In government language what most people call a “trucker” or a “trucking company” is called a “motor carrier” or sometimes just a “carrier.” If you are attempting to fill out a form asking you or your company what kind of trucking activities you are engaged in, the following simplified definitions may be helpful. The word “company” is used below as shorthand to mean any person, partnership, corporation, etc., engaged in these activities. FMCSA stands for the Federal Motor Carrier Safety Administration, 1200 New Jersey Avenue SE, Washington, DC 20590.
These trucking definitions are simplified for easier understanding by the persons required to fill out the above-referenced forms. Legally acceptable definitions of these activities would be longer, more complex, and supported by the results of many administrative proceedings, court decisions, and judicial opinions. If there is any question about the applicability of these simplified definitions, please consult a legal authority.
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