BMC 84 (ICC Bonds)

A BMC-84 bond is a surety bond specific to freight brokers. The Federal Motor Carrier Safety Administration currently requires a $75,000 bond in the process of obtaining a freight broker license.

Since BMC-84 bonds are required, you’re likely wondering how they work and where to get one. In this guide, we’ll break down the process, requirements, and costs of obtaining this bond.

What’s Inside.

• Definition & Example
• How It Works
• How Much Does It Cost?
• Requirements
• BMC-84 Surety Bond vs. BMC-85 Trust Fund
• Where to Find & How to Apply
• Frequently Asked Questions
  

BMC-84 Surety Bond Definition and Examples

BMC-84 bonds are a type of surety bond required by the Federal Motor Carrier Safety Administration (FMCSA). This bond is intended to protect shippers and motor carriers from bad broker practices, like fraud, failure to pay trucking companies, and other contractual shortcomings.

Like other surety bonds, a BMC-84 bond is a contractual arrangement that involves three parties:

• Principal: The freight broker that needs the bond (you)
• Obligee: The agency requiring the bond (the FMCSA)
• Surety: The company that issues the bond, assuring the FMCSA that you, the freight broker, will comply with the requirements

(Quick note: BMC-84 bonds are also known as ICC broker bonds, FMCSA broker bonds, or freight broker surety bonds.)

What Is an Example of a BMC-84 Surety Bond?

Let’s say John’s Groceries needs a trucker to pick up a shipment and deliver it to one of their locations. They hire a freight broker for $2,000 to handle the job. The freight broker then hires Delivery Truckers, Inc. to fulfill the order for $1,000.

After completing the shipment delivery, Delivery Truckers, Inc. goes to the freight broker for payment. However, the freight broker is unresponsive and never pays the agreed-upon $1,000. Delivery Truckers, Inc. files a claim against the BMC-84 bond to receive the payment.

How Does a BMC-84 Surety Bond Work?

A BMC-84 bond is a license bond specific to freight brokers and is a requirement of the licensing process (outlined under 49 U.S. Code § 13906). As mentioned, these bonds protect motor carriers and shippers from bad broker practices, such as:

• Fraud
• Not paying trucking companies the agreed upon-amount
• Not paying trucking companies timely
• Falling short of contractual agreements

As with any other type of surety bond, BMC-84 bonds carry the following characteristics:

• Bonding capacity: The highest amount a wronged party can collect when filing a claim against the bond. $75,000 is the nationwide requirement set by the FMCSA.
• Bond premium: The price of purchasing the bond — most premiums start at 1%.
• Bond term: How long the bond lasts. Terms on BMC-84 bonds are one year.

What Happens When a Claim Is Filed Against the Bond?

If a carrier you work with files a claim for any of the reasons above, the surety will conduct an internal investigation. The surety typically reaches out to both parties for more information and may request written documents (e.g., email correspondence and signed contracts). After investigating, the claim can be found valid or invalid.

If invalid, you’re not penalized or forced to take any action.

But if the claims prove true, then the surety will reimburse the claimant for losses and damages (up to $75,000).

Know that you are still financially liable for the claim expenses. The surety may have paid the claimant on your behalf but you’re still expected to repay the surety for the full amount paid.

How Much Does a BMC-84 Bond Cost?

The lowest rate across the industry is $938. Although, some factors may increase the premium — low credit and inexperience are some examples. Freight brokers with good credit, business experience, and strong financial health usually qualify for the lowest premiums. 

Terms on BMC-84 bonds last only one year. You would need to pay another premium to renew the bond for another year. Good news: the longer you work with a single surety (while carrying a good track record), the more likely you’ll obtain a lower premium.

Requirements for a BMC-84 Surety Bond

Freight brokerages tend to be of higher risk than other businesses. Therefore, sureties will likely request your financial statements, such as your tax returns and profit and loss statements, to review your business’s overall financial health.

Sureties may also require you to sign an indemnity agreement to get approved. This agreement is a legally binding contract in which you agree that you’re financially liable for any valid claim against your bond.

Keep in mind that obtaining a surety bond is only one step in the freight broker licensing process. You’ll also need to secure public liability insurance, cargo insurance, and more.

BMC-84 Surety Bond vs. BMC-85 Trust Fund

Instead of getting bonded, some freight brokers open a trust fund by filing Form BMC-85. Unlike a surety bond, the freight broker has the full $75,000 available and puts it in a trust account.

BMC-84 or BMC-85? 

To determine which is right for you, we’ve outlined some key differences below.

How Do I Get a BMC-84 Surety Bond?

If you’re brand new, you’ll first need to register your new freight brokerage with the FMCSA.  After registration, you’ll receive a designated docket number. You’ll need this number when filing your surety bond and other insurance documents to the FMCSA. 

IMPORTANT: You must file all the required documents within 90 days after the FMCSA has published its notice of intention to register your brokerage.

BMC-84 bonds are commonly available through insurance companies and specialized surety bond providers. Many sureties follow a similar online application process:

1. Apply online with your business information (e.g., business name and business address) and designated docket number.

2. Receive a quote on your bond. In some cases, the surety may want to obtain more information and request additional documents before finalizing your quote.

3. Accept the quote and receive the bond (or refuse and shop around).

After purchasing the BMC-84 bond, you’ll need to file the documentation with the FMCSA. Fortunately, sureties like Worldwide Insurance, Inc. electronically file it on your behalf. 

Convenient, right?

Applying for a BMC-84 Bond

Obtaining a BMC-84 bond is easy when applying with Worldwide Insurance, Inc. Just fill out our initial application form and get an instant quote in minutes. With rates starting as low as 1%, we issue all types of surety bonds in all 50 states. No credit check required and no obligation.

BMC-84 Surety Bond FAQs

What is a BMC-84 surety bond? 

A BMC-84 surety bond is a $75,000 bond required by the FMCSA for freight brokers. These bonds ensure freight brokers comply with all rules and regulations and protect shippers and motor carriers from fraud, missed payments, and more.

Do I need a BMC-84 bond?

Yes, the FMCSA requires a BMC-84 bond for all freight brokers and is part of the licensing process. Failure to renew the bond annually could result in the suspension of your license.

How much does a BMC-84 surety bond cost?

Premiums on a BMC-84 bond typically start at $938. Although, low credit and inexperience can sometimes result in higher premiums.

What can I do if my client files a false claim? 

The surety will conduct an internal investigation, collecting written documents and testimonials about the situation. If the surety discovers the claim is false, then the freight broker will not be held financially liable for any damages or losses related to the alleged claim.

How long does a BMC-84 bond last?

All BMC-84 bonds carry terms of one year. The freight broker would need to pay another premium for each annual renewal.

Can I get a bond with bad credit?

Yes, Worldwide Insurance, Inc. works with thousands of contractors — even those with low credit — to help them meet their bonding requirements. If you need a BMC-84 surety bond but have bad credit, we’ll still work with you.

Can you cancel a BMC-84 bond?

To cancel your BMC-84 bond, you need to file Form BMC-36 (Notice of Cancellation Motor Carrier, and Broker Surety Bonds) and mail it to the FMCSA in Washington, DC. Keep in mind that the premium paid to the surety may not be refundable.

What type of surety bond do I need?

Visit our list of bonds by state to get a closer idea of your bonding requirements. To learn more about surety bonds in general, check out our free surety bond guide.