Freight Broker Surety Bond (BMC-84)

The $75,000 Federal Requirement

MAP-21 set the requirement: since October 2013, freight brokers must maintain $75,000 in financial security — a surety bond (BMC-84) or a trust fund (BMC-85) — filed with FMCSA as a condition of broker authority. The amount applies per broker entity; it is not scaled to volume, revenue, or claim history.

The bond must remain continuously in effect: FMCSA monitors filings, and cancellation or lapse triggers authority revocation proceedings. The surety must give FMCSA 30 days' notice before cancelling a bond — a window designed to let the broker replace coverage, but a broker who cannot replace it loses authority.

BMC-84 versus BMC-85 is the structural choice: the surety bond (BMC-84) involves a surety company guaranteeing payment, with the broker paying a premium; the trust fund (BMC-85) requires the broker to deposit the full $75,000 with a trustee. Most brokers use the surety bond — the trust ties up capital few new brokers have.

The BMC-84 amount hasn’t changed since MAP-21 set it in 2013, but its adequacy is perennially debated: $75,000 spread across multiple unpaid carriers in a broker failure rarely makes everyone whole. Congress has periodically considered increases — carriers should understand the bond as a floor of protection, not a guarantee of payment, and vet broker credit accordingly.

How the Surety Bond Works

The three parties define the relationship: the principal (the broker, who buys the bond), the surety (the company guaranteeing payment), and the obligee (FMCSA, on behalf of the carriers and shippers the bond protects). The surety's promise runs to the obligee — it guarantees that valid claims against the broker will be paid up to $75,000.

The bond protects carriers and shippers, not the broker: when a broker fails to pay a carrier for a transported load, or otherwise causes compensable financial harm within the bond's scope, the injured party can claim against the bond. The surety investigates, pays valid claims up to the penal sum, and then seeks reimbursement from the broker — the surety is the broker's creditor, not its insurer.

Claims aggregate against the $75,000 limit: multiple claimants share the penal sum, and once claims exhaust it, later claimants recover nothing from the bond. In broker failures with large unpaid carrier balances, the bond rarely makes everyone whole — which is why carrier-side due diligence on broker creditworthiness matters beyond the bond's existence.

Trust fund (BMC-85) mechanics differ meaningfully: the broker deposits the full $75,000 with an approved trustee, and claimants draw against the trust — no surety investigation, but also no surety’s claims expertise. Trusts appeal to brokers with capital but poor credit; sureties appeal to everyone else. Both satisfy FMCSA identically.

What Triggers a Bond Claim

Carrier non-payment is the dominant trigger: a broker who accepts a carrier's invoice and fails to pay within the agreed terms — or disappears owing multiple carriers — generates the claims that define BMC-84 practice. Valid claims require the transportation to have been performed under the broker's authority with payment owed and unpaid.

Shipper claims arise where the broker's misconduct causes shipper loss: double-brokering schemes, fraud, and failures to arrange contracted transportation can generate shipper-side claims within the bond's scope. The bond's protection extends to shippers harmed by broker violations, not only to unpaid carriers.

Invalid claims fail on documentation or scope: claimants must prove the debt, the broker relationship, and that the claim falls within the bond's coverage. Disputed loads, undocumented agreements, and claims against the wrong entity are denied — which is why carriers should keep rate confirmations, bills of lading, and payment records organized for every brokered load.

Double-brokering fraud is the modern bond-claim driver: bad actors obtain broker authority, tender freight to carriers, collect from shippers, and vanish — generating the multi-claimant pileups that exhaust the $75,000 quickly. Carriers can protect themselves by verifying broker authority, checking bond status on FMCSA’s system, and watching for the red flags of fraudulent brokerage.

What the Bond Costs

Premiums are a fraction of the penal sum: annual BMC-84 premiums typically range from roughly 1% to 10%+ of the $75,000 — meaning roughly $750 to several thousand dollars per year — depending on the broker's credit, financial strength, experience, and claims history. The bond is priced on the broker's risk, not just the $75,000 face amount.

Credit is the primary pricing factor: strong personal and business credit earns the lowest premiums; weak credit, prior bankruptcies, or bond claims push premiums toward the top of the range or require collateral. New brokers without industry track records pay more than established operations with clean histories.

The premium is an annual cost of authority: budget it alongside the other costs of broker operations — contingent cargo insurance, E&O coverage, TMS and compliance systems. Brokers comparing surety providers should compare financial strength and claims-handling reputation, not just premium — a cheap bond from a weak surety serves no one when claims arrive.

Surety premium pricing weighs personal credit most heavily, then business financials, industry experience, and loss history: a new broker with strong personal credit pays far less than one with prior bankruptcies or judgments. Collateral requirements — letters of credit, cash — enter for higher-risk applicants, raising the true cost well above the quoted premium.

Contingent Cargo and E&O: The Broker's Other Coverages

Contingent cargo insurance is the broker's cargo backstop: when the underlying carrier's cargo policy denies a claim or proves insufficient, the broker's contingent cargo can respond — protecting the broker against cargo liability that flows uphill. Shippers increasingly expect brokers to carry it; it is commercially close to mandatory even where not legally required.

Errors and omissions (E&O) covers the broker's professional liability: mistakes in arranging transportation — booking errors, documentation failures, negligent carrier selection claims — that cause shipper or carrier loss. E&O is distinct from the surety bond (which addresses financial failure) and from cyber coverage (which addresses data breach) — see our trucking E&O insurance guide for the distinctions.

The full broker coverage stack is bond plus contingent cargo plus E&O plus general business coverage: each addresses a different risk, and gaps between them are where broker liability lives. New brokers should build the complete stack with a broker-side-knowledgeable agent rather than assembling it piecemeal.

Contingent cargo deserves its own underwriting attention: it typically excludes what the underlying carrier’s policy excludes, responds only after the carrier’s coverage is exhausted or denied, and carries its own commodity and territorial limitations. Brokers should understand it as a backstop with boundaries — and disclose its limits honestly to shippers rather than presenting it as primary cargo insurance.

Compliance and Authority Maintenance

Keep the bond continuously filed: monitor renewal dates, respond to surety communications, and never let cancellation notice mature into revocation. FMCSA's 30-day cancellation notice is a final warning, not a grace period — brokers who receive one should have replacement coverage bound immediately.

UCR, BOC-3, and authority hygiene accompany the bond: broker authority requires the same maintenance discipline as carrier authority — unified carrier registration, process agents in every state, and accurate FMCSA records. Lapses in any element compound into enforcement exposure.

Financial discipline is the real compliance: the bond exists because broker failures harm carriers — brokers who pay carriers promptly, maintain reserves, and avoid overextending credit rarely face claims. The cheapest bond strategy is being the broker no one needs to claim against.

Authority maintenance extends beyond the bond: the BOC-3 process agent filing must stay current in every state, UCR registration renews annually, and FMCSA records — addresses, officers, contact information — must reflect reality. Enforcement sweeps periodically target lapsed filings; a broker whose authority gets revoked mid-operation faces both legal exposure and commercial ruin.

How JackRick Helps With Broker Authority Coverage

Shay Denise, as a licensed commercial insurance broker, places BMC-84 bonds alongside the broker's full coverage stack — contingent cargo, E&O, and business coverage — with attention to surety strength and claims reputation, not just premium. New-broker guidance includes the complete authority-maintenance picture.

Coverage varies by carrier and state, and nothing on this page is legal or insurance advice — discuss your operation with a licensed insurance professional before making coverage decisions.

For carriers evaluating broker creditworthiness — the due diligence the $75,000 bond limit makes necessary — our dispatch service works only with vetted, paying brokers. Dispatch runs a flat 10% per load, invoiced every Friday, with 30 days' written notice and no long-term contract. Call (757) 744-2484.

Shay Denise places BMC-84 bonds with attention to surety strength and claims reputation, alongside contingent cargo, E&O, and the broker’s business coverage — the complete authority package. Two caveats apply to everything above: coverage varies by carrier and state, and this guide is not legal or insurance advice — talk to a licensed professional about your situation.

Questions carriers ask

More in this series

• Freight Broker Authority Guide
• Atlanta Freight Hub
• Broker Credit Checks