Freight brokers are an important force in the American economy, helping connect shippers of products with carriers to make sure that deliveries are made, keeping the world going round and round. In order to become a freight broker and join this group of crucial service businesses, you need to obtain a freight broker bond.
When and why do I need a freight broker bond?
Before getting a license as a freight broker, you need to obtain a freight broker surety bond, or place a collateral of $75,000 into a trust fund. As long as you operate as a freight broker, you need to maintain your surety bond. The purpose of the surety bond is to provide a guarantee that freight brokers will uphold the ethical standards, and pay the carriers that they hire.
Who does a freight broker bond protect?
The surety bond protects motor carriers whom the broker hires to transport goods. The bond ensures that the broker honors their contracts with carriers, and pays them for their work. In the event that a broker dos not pay a carrier for work performed, the carrier can file a claim against the bond to receive the monies that the broker owes to them. The surety will review the case, and if it is valid, pay out the value of the claim (up to the bond amount), to the carrier. Then, the broker would be responsible for reimbursing the surety for the cost of the claim.
How much does a freight broker bond cost?
Freight broker bonds are legally required to be written for $75,000. The premium for the bond (meaning the amount that you would pay) is generally between 2% to 4% each year, based on a number of factors, including creditworthiness and financial standing. Some clients with good credit can get a freight broker bond for less than $1,000.
What do I need to get a freight broker bond?
The process for getting a freight broker bond is simple and straightforward, because there is a standard bonding amount, and standard forms. Generally, you can get a quote within 24 hours of submitting your request.
How do I get a freight broker bond?
Our knowledgeable and friendly team of bonding professionals at Viking Bond is experienced in providing freight broker surety bonds across the United States. We can guide you through the process of receiving a quote and securing your freight broker bond today.
There are three easy ways to request a quote for a freight broker bond: