Surety bond

A surety bond is a three-party agreement in which a surety company guarantees payment from one party (the principal) to another (the obligee) up to a specified amount.

In freight brokering, the principal is the broker, the obligee is FMCSA (on behalf of carriers and shippers who may file claims), and the surety is a bonding company. The broker pays an annual premium and signs an indemnity agreement promising to reimburse the surety for any payouts.

The annual premium reflects the surety's underwriting view of broker creditworthiness. New brokers with limited credit can pay 5-10x what established brokers with strong credit pay for identical $75,000 coverage.

Why this matters for freight brokers

Surety bonds are not insurance. The surety is not at risk of loss in the underwriting sense; the broker reimburses any payout. Treat the bond as a credit facility, not a protection layer.

Related terms

• Broker bond ($75,000 federal surety) — The freight broker bond is the $75,000 federal financial responsibility requirement FMCSA mandates for every property broker, satisfied via BMC-84 surety bond or BMC-85 trust fund.
• BMC-84 — BMC-84 is the surety-bond form a freight broker files with FMCSA to satisfy the $75,000 federal financial responsibility requirement.
• BMC-85 — BMC-85 is the trust-fund alternative to the BMC-84 surety bond for satisfying the $75,000 federal financial responsibility requirement for freight brokers.