Freight broker surety bond

[Admin]

Don, I couldn't agree more. The advice given is awfully risky and no way to run a business, if you plan on staying in business. Being self-insured is never a good practice, as the average company can not survive even one claim. With freight brokers having such a large ratio of claims, it is especially risky.

The BMC-85 is a great choice for anyone that can not obtain the bond. Although, I do believe it is safest to have the backing of a large surety. I know little about the BMC-85 since I do not write them. What happens in the event of a claim? I am assuming any funds that are not built up in the principals account are sought after? In this case one would still be self insuring, but they would simply be required to make a deposit and have the bank hold the money for them so they can't touch it, correct?

Don, since you are always willing to contribute to help the forums users, feel free to start new threads about the BMC-85, to argue some of the good points of it. Many brokers are not aware of it and I think that it is a good option for many. Just go to the " ICC Bonds" category and click the "new thread" icon.

Thanks as always for your two cents Don...

[don jipping]

as you correctly stated, claims can make or break you. that is why it is so important that whomever your coverage is thru, trust fund(bmc-85) or bond(bmc-84), that they know the transportation business and recognize bogus claims when presented. when a claim is presented on a bmc-85 the trust administer must determine whether the claim is valid or not. unfortunatly, some trust administrators are financial institutions who have no clue of what a freight broker even is. These banks should not be issuing bmc-85s. Once a claim is determined to be valid and is paid, the trust like the surety bond must be reimbursed by the broker.

the thing for brokers to remember is whether you have a trust or a bond, have the confidence in your filer knowing that their claims department is working for you and has the knowledge and experience to guard and protect you.

don

[Admin]

Great post don...like I said, feel free to start a threads regarding the BMC-85 and the pros of it. We are always looking to help educate everyone related to our industry.

[Unregistered]

Too much credit can be a bad thing.

Many creditors will be wary when you such a high credit limit. They're afraid you'll get their loan, and then run up the credit on your cards.

If you ever get turned down for a loan, see if they'll tell you why? They may not, but if they're honest, I think that'll be the reason.

Lots of good credit is good, high credit card limits isn't always good.

[don jipping]

I would like like to hear from parties thinking about getting brokers authority and what they have heard about the bond or the trust. there are definite advantages and disadvanatages to both.
also would like to hear opinions from past or current brokers and why they selected the coverage they did----any takers???

[craig]

I would like like to hear from parties thinking about getting brokers authority and what they have heard about the bond or the trust. there are definite advantages and disadvanatages to both.
also would like to hear opinions from past or current brokers and why they selected the coverage they did----any takers???

Don, I am about to secure a BMC85 today. I am going to try to use a line of credit from savings acct through the bank.
Is this proper? I haven't qualified the person at the bank that would be in charge of it yet however this bank has their own "Accordia" & that is what they told me to do. Any help?

[don jipping]

Don, I am about to secure a BMC85 today. I am going to try to use a line of credit from savings acct through the bank.
Is this proper? I haven't qualified the person at the bank that would be in charge of it yet however this bank has their own "Accordia" & that is what they told me to do. Any help?

Craig- a couple of questions pop in my mind right away,who is going to file the bmc-85, the bank or a financial company authorized by the FMCSA to file the bmc-85?
Is the line of credit going to be used to secure a letter of credit, or is it going to be considered a loan in which you will be charged interest?
If it is indeed going to be used to secure the L.O.C. , without being considered a loan, what is the banks charge to issue L.O.C.?
The reason I ask these questions is I want to make sure you make the best business decision for the use of your $ or line of credit.
just remember whoever files your bmc-85 must be authorized by the FMCSA to do so.
If I can be of further assistance please contact me.
Don Jipping

[Craig]

This is not a loan. I don't know yet what the charges are, can they be expensive?
The bank will secure it, do I have any choices here?
Should I ask the bank (Wells Fargo) if they are authorized to do it by the FMCSA?
Do you think I'm doing this correctly?

[Craig]

Please reply asap as i am going to leave at noon MST to get this done.

[don jipping]

craig, 2% fee is rule of thumb for locs, some banks have a $500 minimum fee,the bank you referred to generally has a slow turnaround time, so be sure to ask.
find out if there are any maintenance fees, if they are authorized to file bmc85, who handles any possible claims that may be presented? do they charge on a per claim basis? do they contact you when they pay out?
craig this is your $ on the line, I strongly recommend you have a company who specializes in broker trust funds to adminster your trust fund.
don