Full explanation
A surety bond in the freight industry is a financial guarantee filed with FMCSA (form BMC-84 or BMC-85 for trust funds) that protects shippers and carriers against financial loss if a broker or freight forwarder fails to meet its contractual obligations. As of 2013, FMCSA requires a minimum $75,000 surety bond for all licensed freight brokers — increased from the previous $10,000 minimum. The bond provides a claims fund that injured parties can file against if the broker fails to pay carriers for services rendered or fails to refund shippers for undelivered services. The bond does not cover cargo damage (that's the carrier's insurance responsibility) and is not an unlimited fund — once claims exhaust the $75,000, additional claimants may receive nothing. Surety bonds are purchased from authorized surety companies and typically cost 1-10% of the bond amount annually, depending on the applicant's credit and financial history. Bond cancellation triggers automatic suspension of broker authority after a 30-day grace period.
Frequently asked questions
How much does a freight broker surety bond cost?
Annual premiums typically range from $750 to $7,500 (1-10% of the $75,000 face value), depending on the applicant's personal credit score, business financials, and industry experience.
What can I file a bond claim for?
Carriers can file claims when a broker fails to pay for completed transportation services. Shippers can file when a broker accepts payment but fails to arrange the agreed transportation. Claims must be filed with the surety company that issued the bond.
Is a $75,000 bond enough to protect against broker misconduct?
Often not. A single unpaid load can exceed $5,000, and a non-compliant broker may leave dozens of carriers unpaid before being caught. The $75,000 is shared among all claimants, often resulting in partial recovery.
Related terms
A $75,000 surety bond (BMC-84) required by FMCSA for all licensed freight broker...
FMCSA AuthorityOfficial permission from the Federal Motor Carrier Safety Administration to oper...
Operating AuthorityLegal permission to operate as a for-hire carrier, broker, or freight forwarder ...
Cargo LiabilityA carrier's legal and financial responsibility for loss or damage to freight whi...