What is an Iowa Freight Broker Bond?
Freight broker registration applicants are required by the Federal Motor Carrier Safety Administration (FMCSA) to submit a surety bond. The requirement is in accordance with Title 49 §13906 of the United States Code.
The purpose of an Iowa Freight Broker Bond (BMC-84) is to financially protect the passengers and carriers in case the freight broker failed to fulfill his or her contractual obligations.
What is the bond amount?
The Freight Broker Bond amount is $75,000.
If you have an excellent credit score, you may be eligible to pay a very low bond premium or less than 1% of the total bond amount!
Find out you need to pay for this bond today! Get your FREE quote here!
What are the bond conditions?
- The bond should be issued by a surety bond company who is authorized by the Secretary of Treasury such as Surety Bond Authority
- The bond will ensure financial responsibility and the supplying of transportation subject to the ICC Termination Act of 1995
- The Principal shall comply with the rules and regulations of the Federal Motor Carrier Safety Administration
- The Principal will be held liable for any damages committed during the term of the bond
- The Bond will be used to pay any claim made against the freight broker from the freight broker’s failure to pay freight charges stated in its contract
- The bond will remain valid until canceled. In case of cancellation, a 30-day notice is required
How do I obtain a Freight Broker Bond?
The first step is to submit an application.
An expert underwriter will start with the prequalification process soon after. The underwriter will check the following:
- If you have performed your obligations on time in the past
- Your financial capability
- Your credit score
Once qualified, you will be asked to sign an indemnity agreement. We will complete the BMC-84 or Freight Broker Bond form for you, and that’s it!
What are the other requirements in order to be registered as a Freight Broker?
- Completed Motor Property Carrier and Broker Authority application form (OP-1)
- Pay the necessary processing fee of $300 per Operating Authority such as the following:
- Motor Common Carrier of Property (except Household Goods)
- Motor Contract Carrier of Property (except Household Goods)
- Motor Common Carrier of Household Goods
- Motor Contract Carrier of Household Goods
- Broker of Property (except Household Goods)
- Broker of Household Goods
- United States-based Enterprise Carrier of International Cargo (except Household Goods)
- United States-based Enterprise Carrier of International Household Goods
The processing time will be 4-6 weeks. Once approved, you will get your MC number or Operating Authority.
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