Freight Broker Bonds: What Carriers Need to Know

If you’re a carrier who’s ever been stiffed by a freight broker, you’ve probably heard of the “freight broker bond.” But what does it actually do for you—and how do you get paid through it?

A freight broker bond is a financial safety net designed to protect motor carriers when a broker fails to pay for completed shipments. Whether you’re new to transportation contracts or knee-deep in a broker insolvency issue, understanding how this bond works can mean the difference between recovering your money or writing it off.

This post breaks down the BMC-84 bond, explains the bond claim process, and outlines how to position yourself for a successful recovery.

What Is a Freight Broker Bond?

A freight broker bond (also known as a BMC-84 bond) is a $75,000 surety bond that all federally licensed freight brokers are required to carry under FMCSA regulations.

The Purpose of the Bond

It protects motor carriers and shippers in the event the broker:

• Fails to pay freight charges
• Engages in fraudulent behavior
• Violates federal transportation law

In simple terms, it’s a financial guarantee backed by a surety company that ensures the broker will fulfill their payment obligations—or the surety will step in to compensate the damaged party (up to the bond limit).

BMC-84 vs. BMC-85: What’s the Difference?

Although “BMC-84” is the most common term you’ll hear, there are actually two types of security options brokers can choose from:

• BMC-84: A surety bond backed by a third-party insurance company.
• BMC-85: A trust fund where the broker deposits $75,000 of their own money into an account.

Most carriers interact with BMC-84 bonds, as these are easier to claim against in the event of default.

How the Bond Claim Process Works

When a broker goes silent, refuses to pay, or files for bankruptcy, you can file a bond claim with their surety provider.

Step-by-Step Bond Claim Process:

1. Identify the Surety Company
   Use the FMCSA’s SAFER system or Licensing & Insurance portal to locate the broker’s bond information and the contact details for their surety.

    

2. Gather Documentation
   You’ll need:

    

   • A signed rate confirmation
   • Bill of lading
   • Proof of delivery
   • Invoices
   • Email correspondence (if available)

      

3. Submit the Claim
   Contact the surety provider and submit your documents. Most will provide a claim form or require a written demand.

    

4. Investigation Period
   The surety reviews the claim, contacts the broker for a response, and determines whether the claim is valid. This can take 30 to 90 days.

    

5. Claim Payout
   If approved, the surety will issue payment—up to the bond limit—based on the strength of your documentation and the broker’s ability to refute the claim.

    

Limitations of Freight Broker Bond Claims

Freight broker bonds are helpful—but they’re not a guarantee you’ll recover the full amount you’re owed.

Here’s why:

• Cap on Funds: The bond only covers up to $75,000 total. If multiple carriers file claims, payouts are split on a first-come, first-served basis or pro rata.

   

• Denials Are Common: Claims may be denied for insufficient proof, vague contract terms, or late submissions.

   

• Deadlines Matter: You generally have 12–18 months from the date of service to file your claim.

   

That’s why working with a legal team familiar with the bond claim process can dramatically improve your chances.

What to Do If the Bond Isn’t Enough

If the bond has been exhausted or doesn’t cover your full loss, you still have legal options, including:

1. Civil Lawsuit

You can sue the broker directly for breach of contract. If successful, you may obtain a judgment and enforce collection via liens, garnishments, or other remedies.

2. Bankruptcy Filing

If the broker has filed for bankruptcy, you’ll need to submit a creditor claim through the bankruptcy court. Some freight charges delivered close to the bankruptcy filing may qualify as priority claims.

3. Third-Party Liability

In some situations, other entities (such as factoring companies or surety co-obligors) may bear some liability for payment.

Realistic Example

Let’s say you delivered a load worth $6,000. The broker goes out of business two weeks later and stops answering your calls. You search FMCSA records and find their surety company is XYZ Insurance.

You file a claim with all necessary documents. The surety company confirms the broker did not dispute your charges and approves your claim. Three other carriers also filed, totaling $100,000 in claims—more than the bond covers.

You receive a partial payout of $4,200 and work with a collections attorney to pursue the balance through legal action. In total, you recover 90% of your losses—far more than if you had taken no action at all.

FAQs About Freight Broker Bonds

How long does it take to get paid from a freight broker bond?

The process typically takes 30–90 days, depending on how quickly the surety can investigate and respond.

Can I file a bond claim if the broker declared bankruptcy?

Yes. A bond claim is separate from the bankruptcy process, though you may also need to file a claim with the bankruptcy court to maximize recovery.

What if I don’t have a signed rate confirmation?

You may still file a claim, but your chances of success drop without clear, signed documentation. Email confirmations and proof of delivery may help support your claim.

Take Action—Don’t Let Broker Defaults Go Unchallenged

The freight broker bond exists to protect your business. But to benefit from it, you must act quickly, document thoroughly, and follow the bond claim process step by step.

If you’re struggling with an unpaid freight invoice and the broker has gone dark—or worse, filed for bankruptcy—we can help you navigate your options. Freight Collection Solutions has helped hundreds of carriers file successful bond claims and pursue unpaid debts from insolvent brokers.