bond question

[select]

I have been in business for 1 year 3 months and stayed on top of my credit and pay terms, As of Sept 11 a company that has NEVER hauled a load for me reported to First Advantage of non payment and also had First Ad. file on my bond (Nova Casualty). The trucking company that made the claim realized the mistake after it was to late but called First Advantage to fix the claim and have them contact my bonding agent which from speaking with them seems I am SOL... I have letters from both the subject carrier and First Advantage showing that a mistake was made. My question is

Is it normal after 1 claim that the Bonding Company cancels? (They DID)

Since I am in the market will this hurt me while trying to get rebonded?

Legal Reprecussions?

Any route other that Surety Bond?

Please help sick about this!!!!

[Admin]

Sorry to hear about your situation. To answer your questions...


Yes, it is normal for a surety to cancel after one claim. However, I am surprised that they didn't rescind due to the conditions of your claim.

Having the claim on your record will hurt you in trying to find a new carrier. Be prepared to show proof that it was filed in error.

There are other options than the surety bond. You can do a trust fund called the BMC-85. We do not do it, but there are members of our forums that do. Do a search for more information.

[select]

the claim no longer is on my Credit report at First Advantage but I am assuming that if a carrier pulls FMSCA up that will see that as of OCt 11 bonded in cancelled?


Also I feel that before doing this First Advantage should do just a little research instead of just pouncing on someones bond? If they would have all of this could have been resolved. Heck for that any carrier, could call upset over anything and make some bogus claim on any brokers bond with First Advantage and nothing the broker could do....

Thanks

Pissed OFF

[PT]

the claim no longer is on my Credit report at First Advantage but I am assuming that if a carrier pulls FMSCA up that will see that as of OCt 11 bonded in cancelled?


Also I feel that before doing this First Advantage should do just a little research instead of just pouncing on someones bond? If they would have all of this could have been resolved. Heck for that any carrier, could call upset over anything and make some bogus claim on any brokers bond with First Advantage and nothing the broker could do....

Thanks

Pissed OFF

Unfortunately you are right. When it comes to ICC bonds - Surety cancels first and then asks question. However, if the bond was written through Nova - and there is proof that the claim was not valid - they may very likely reinstate your bond (probably for a small fee)

[don jipping]

the claim no longer is on my Credit report at First Advantage but I am assuming that if a carrier pulls FMSCA up that will see that as of OCt 11 bonded in cancelled?


Also I feel that before doing this First Advantage should do just a little research instead of just pouncing on someones bond? If they would have all of this could have been resolved. Heck for that any carrier, could call upset over anything and make some bogus claim on any brokers bond with First Advantage and nothing the broker could do....

Thanks

Pissed OFF

I agree that the bonding company should contact you 1st before passing judgement. But unfornunatly as admin mentions, generally this is not their procedure.
The insurance company you mentioned has a reputation for doing this. I personally received many calls from brokers who have had the same thing happen to them.
My suggestion to them was to get a BMC-85 Trust Fund. I have many clients who have been in the position as you are in now. When a claim is filed against one of our clients, we call our client to discuss it with them. We want your authority to stay active so we are not about to cancel your coverage.

Don Jipping

[PT]

I agree that the bonding company should contact you 1st before passing judgement. But unfornunatly as admin mentions, generally this is not their procedure.
The insurance company you mentioned has a reputation for doing this. I personally received many calls from brokers who have had the same thing happen to them.
My suggestion to them was to get a BMC-85 Trust Fund. I have many clients who have been in the position as you are in now. When a claim is filed against one of our clients, we call our client to discuss it with them. We want your authority to stay active so we are not about to cancel your coverage.

Don Jipping

Both the BMC-85 and the BMC-84 have their advantages. If you qualify for the bond (BMC-84) without any collateral, it's the better option. The BMC-85 is a good option if you don't qualify for the bond - but since you have to eventually post $10,000 that would be used if their is a claim it's certainly something to think about.