Bmc84 Vrs. Bmc85

[chefman]

What is the difference between these two?

[james scott]

A BMC-84 is a broker bond issued by insurance companies or suretys.
A BMC-85 is a broker trust fund administated by a USDOT authorized financial institution.

BMC-84-insurance company guarantees performance
BMC-85-broker guarantees his own performance

[Admin]

James is correct. The title BMC-84 is actually the governments term. In the surety industry it is typically referred to as an ICC Bond.

[Phillies]

One more comment on the difference between these two items... If you are pursuing the BMC-85 (Trust Fund), you will undoubtedly have to post the $10,000 in some form of collateral (ILOC, real estate, etc.) in addition to a premium. This option is great for companies that don't qualify for the actual ICC Bond (BMC-84) due to poor credit.

[Admin]

There is no need to post an ILOC or real estate for the BMC-85, as it is a trust fund, not a guarantee like the bond. The broker would give $10,000 cash to a bank within 1 year. If there is a claim, their cash is used from the BMC-85 trust account.

It is quite common to have to post 100% collateral in the form of an ILOC or real estate for the bond (BMC-84) for companies that are too high of a risk to be bonded otherwise. If and when 100% collateral is required for the bond, the BMC-85 trust fund is then a better choice. However, if you can get the bond approved without collateral then it is your best option.

[Carboholic]

From reading the above information, I understand the how each option may be beneficial depending on individual circumstances, but...

In the eyes of the Interstate Commerce Commission, does either one reflect more credibility than the other?

[Phillies]

Originally Posted by Carboholic

From reading the above information, I understand the how each option may be beneficial depending on individual circumstances, but...

In the eyes of the Interstate Commerce Commission, does either one reflect more credibility than the other?

I don't believe so - no.

[don jipping]

The FMCSA does not care if you have a 84 or a 85. Just as long as you are in compliance.

Don