Bond refund

[ChrisT.]

Silly question im sure but I am seriously considering starting my own freight brokering buisness which requires a 10k bond.
I have the full 10k to bond but wondered if for what ever reason my buisness fails will I be able to cancel the bond and reaquire my $10k?

Thank you

[Surety Queen]

Originally Posted by ChrisT.

Silly question im sure but I am seriously considering starting my own freight brokering buisness which requires a 10k bond.
I have the full 10k to bond but wondered if for what ever reason my buisness fails will I be able to cancel the bond and reaquire my $10k?

Thank you

Chris -

There are a few different scenarios for satisfying FMCSA's requirement of a $10,000 bond. The bond itself (BMC-84), is generally issued with premium only when a customer qualifies. There are some instances when the bond could be written with premium plus collateral (which we don't recommend). If this happens, and you close your business, the collateral should be returned to you - but there would be no return of premium.

If collateral is required for a bond, it's advisable to consider the trust fund (BMC-85) directly with FMCSA. We don't handle this program, but if you call our office, we'll be happy to give you the name of a company who does. I hope this answers your question. If not, please feel free to call me at 215-766-1990 and we can discuss your options. Thanks.

Patsy

[don jipping]

Keep in mind that there is no statute of limitations as far as collecting unpaid freight charges. Even though industry standards generally recognize 9 months, most insurance companies will hold any monies or Letters of Credit for a period of not less than a year from cancellation.

BMC-85 Trust Funds are generally returned within 90 days provided there are no outstanding claims against the trust.

Don Jipping

[Admin]

Great point Don!

That is why we always recommend clients that need to post collateral to obtain the BMC-85 instead. If we can not write the bond with premium only we always refer our clients elsewhere.

Fortunately, most can be written w/o collateral.