BMC-84 Bonds

At Surety Bonds Agent, we offer a full range of surety bonds nationwide through an extended carrier network. Learn about BMC-84 bonds below, and contact us today to request a quote. If you have additional questions or want to explore bonding solutions for your business, speak with one of our knowledgeable surety bond experts.

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FREE BMC-84 BOND QUOTE

What Are BMC-84 Bonds?

BMC-84 bonds are a type of license and permit bond required by the Federal Motor Carrier Safety Administration (FMCSA), an agency of the Department of Transportation. The bond, named after the BNC-84 form that must be filed with the FMCSA, protects shippers and carriers against nonpayment by freight brokers and freight forwarders. Nonpayment of fees due to a shipper or carrier can result in a claim for damages against the freight broker’s or forwarder’s BMC-84 bond.

Who Needs Them?

The FMCSA requires freight brokers and freight forwarders to purchase a $75,000 BMC-84 bond to obtain or renew their license to operate within the United States. They have the option of placing $75,000 in cash into a BMC-85 trust that serves the same purpose, or to provide a $75,000 irrevocable letter of credit or line of credit. Most, however, choose to purchase a BMC-84 surety bond instead of tying up their cash or credit.

Once issued, the BMC-84 bond must remain in force and be renewed annually to avoid license suspension or revocation.

How Do They Work?

A BMC-84 bond is a legally binding agreement between three parties:

  • The obligee is the FMCSA, the federal agency requiring the purchase of the bond.
  • The principal is the freight broker or freight forwarder required to purchase the bond and legally obligated to pay claims against the bond.
  • The surety is the company that underwrites and issues the BMC-84 bond.

When a claim is received for nonpayment of fees due to a shipper or carrier, the surety will investigate the matter and try to negotiate an amicable settlement. But if that’s not possible, the surety will pay the claim on behalf of the principal. This creates a debt that the principal is legally obligated to repay to the surety.

The maximum that will be paid out on a single claim is the $75,000 required bond amount (also known as the bond’s “penal sum”).

What Do They Cost?

The annual premium for a BMC-84 bond is calculated by multiplying the $75,000 penal sum by the premium rate the surety assigns to the principal. That premium rate reflects the surety’s assessment of the risk in extending credit to the principal for paying claims on the principal’s behalf. The primary factors the underwriters will consider are the principal’s personal credit score, personal finances, business finances, and industry experience.

A well-qualified principal will pay a premium rate somewhere between one and five percent of the bond’s penal sum, or between $750 and $3,750. A principal with lesser credit may still be able to purchase a BMC-84 bond but will pay a much higher premium rate.

At Surety Bonds Agent, we offer a full range of surety bonds nationwide through an extended carrier network. Learn about BMC-84 bonds below, and contact us today to request a quote. If you have additional questions or want to explore bonding solutions for your business, speak with one of our knowledgeable surety bond experts.

CONTACT US FOR A

FREE BMC-84 BOND QUOTE

What Are BMC-84 Bonds?

BMC-84 bonds are a type of license and permit bond required by the Federal Motor Carrier Safety Administration (FMCSA), an agency of the Department of Transportation. The bond, named after the BNC-84 form that must be filed with the FMCSA, protects shippers and carriers against nonpayment by freight brokers and freight forwarders. Nonpayment of fees due to a shipper or carrier can result in a claim for damages against the freight broker’s or forwarder’s BMC-84 bond.

The FMCSA requires freight brokers and freight forwarders to purchase a $75,000 BMC-84 bond to obtain or renew their license to operate within the United States. They have the option of placing $75,000 in cash into a BMC-85 trust that serves the same purpose, or to provide a $75,000 irrevocable letter of credit or line of credit. Most, however, choose to purchase a BMC-84 surety bond instead of tying up their cash or credit.

Once issued, the BMC-84 bond must remain in force and be renewed annually to avoid license suspension or revocation.

A BMC-84 bond is a legally binding agreement between three parties:

  • The obligee is the FMCSA, the federal agency requiring the purchase of the bond.
  • The principal is the freight broker or freight forwarder required to purchase the bond and legally obligated to pay claims against the bond.
  • The surety is the company that underwrites and issues the BMC-84 bond.

When a claim is received for nonpayment of fees due to a shipper or carrier, the surety will investigate the matter and try to negotiate an amicable settlement. But if that’s not possible, the surety will pay the claim on behalf of the principal. This creates a debt that the principal is legally obligated to repay to the surety.

The maximum that will be paid out on a single claim is the $75,000 required bond amount (also known as the bond’s “penal sum”).

The annual premium for a BMC-84 bond is calculated by multiplying the $75,000 penal sum by the premium rate the surety assigns to the principal. That premium rate reflects the surety’s assessment of the risk in extending credit to the principal for paying claims on the principal’s behalf. The primary factors the underwriters will consider are the principal’s personal credit score, personal finances, business finances, and industry experience.

A well-qualified principal will pay a premium rate somewhere between one and five percent of the bond’s penal sum, or between $750 and $3,750. A principal with lesser credit may still be able to purchase a BMC-84 bond but will pay a much higher premium rate.

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Request a quote online or call today to speak with one of our surety bond experts about obtaining a BMC-84 bond.