“How Much Will a $75K Bond Cost Me?” And Other Questions Answered

 Update: DAT now offers a 75K surety bond at a special rate for DAT customers. Learn more.

As most of you are aware, the Moving Ahead for Progress in the 21st Century (MAP-21) Act takes effect in less than two months, on October 1. One of the provisions of the act requires that freight brokers secure a $75,000 bond or trust fund—a significant change from the $10,000 that is currently required.

From the comments on our own blog and other industry websites, it seems that brokers still have questions related to the new requirement. Over the past few weeks I’ve communicated with a number of reputable insurance companies that provide the $75,000 bond. Below are some of the things I’ve learned. Hopefully this will answer some of your frequently asked questions.

Q: The FMCSA requires that I have either a $75,000 surety bond or a $75,000 trust fund. What’s the difference?
A: A trust fund (BMC-85) requires that the broker put up the full $75,000 up front. That money goes into a central fund to pay any claims. With a surety bond (BMC-84), you pay an annual premium to a surety company which works to mitigate bond claims on your behalf. One note: the surety bonds are regulated by the government to make sure there is enough money set aside to pay any claims. BMC-85 trust funds are unregulated, so if you go that route, be sure you’re dealing with a reputable provider.

Q: How much will a $75,000 surety bond cost me?
A: The annual premium you’ll pay depends on your risk, which is determined by factors such as:
• The number of years your company has been in business.
• The financial condition of the company.
• The company’s credit score.

In my research, annual premiums ranged from the low $4,000s to mid $5,000s. Companies in business for many years with good credit scores will pay less; newer companies and those with lower credit scores will pay more.

Q: I’m new to the business. Can I still qualify for a $75,000 bond?
A: Brokers who have been in business less than two years may have to meet additional requirements. For example, the insurance company may check the personal credit score of the principals of the company. It may also require collateral to secure the bond.

Q: What paperwork is required apply for a $75,000 bond?
A: Each insurance company has its own requirements, but the following documents may be required:
• The company’s financial statements.
• Proof of insurance.
• A signed indemnity form that allows the insurance company to act on your behalf.
• An application form.

Q: Do I need to fill out and submit the BMC-84 form to the FMCSA?
A: After you’ve been approved for the bond, it’s usually the insurance company that will file the BMC-84 form with the FMCSA.

Categories: Broker News



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