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    A BMC-85 surety bond, often referred to simply as a BMC-85, is a financial guarantee used in the transportation industry in the United States. It's specifically relevant to freight brokers and freight forwarders

    What is a BMC-85 Used For?

    1. Financial Protection for Shippers and Carriers: The BMC-85 acts as a trust fund or surety bond that freight brokers and freight forwarders must have in place. It ensures that shippers and carriers are protected and will be paid for their services in case the broker or forwarder fails to fulfill their financial obligations.

    2. Regulatory Compliance: The Federal Motor Carrier Safety Administration (FMCSA) requires freight brokers and freight forwarders to obtain either a BMC-85 trust fund or a BMC-84 surety bond. This requirement is part of the licensing process for these entities, ensuring they meet federal standards for operating in the industry.

    3. Building Trust in the Industry: Having a BMC-85 demonstrates to clients and partners that a broker or forwarder is compliant with federal regulations and financially capable of handling transactions. This can be crucial for building trust and credibility in the competitive freight industry.

    4. Risk Management: For brokers and forwarders, the BMC-85 provides a form of risk management. It helps assure their clients that there is financial backing to cover any potential payment issues, thus safeguarding the broker’s or forwarder’s business reputation.

    How Much does a BMC-85 Surety Bond Cost?

    The cost of a BMC-85 surety bond can vary based on several factors. The BMC-85 is not a traditional surety bond but rather a trust fund agreement, and its cost structure can be different from standard surety bonds. Here are some key points to consider:

    1. Amount of the Bond: The Federal Motor Carrier Safety Administration (FMCSA) requires a BMC-85 bond to be in the amount of $75,000. This is the amount that the bond must cover in the event of a claim.

    2. Cost Factors: Unlike traditional surety bonds where premiums are a percentage of the bond amount, the BMC-85 often involves a setup fee and annual administration fees. These fees can vary based on the provider of the bond.

    3. Provider Rates: Different companies offering BMC-85 bonds may have varying fee structures. Some might charge a flat annual fee, while others might have additional charges based on services provided.

    4. Credit Score and Financial History: For some trust fund providers, the financial history and credit score of the applicant can influence the cost. A better credit score might lead to lower fees, although this is more commonly a factor in traditional surety bonds (BMC-84) rather than BMC-85 trust funds.

    5. Market Conditions: The surety and trust fund market can fluctuate, leading to changes in how much providers charge for their services.

    What Is Right for Me: BMC-85 Vs. BMC-84?

    Deciding whether you need a BMC-84 or BMC-85 bond as a freight broker or freight forwarder in the United States involves understanding the differences between these two options and assessing your business needs and preferences. Here are the key factors to consider:

    Nature of the Bond

      • BMC-84:

        This is a surety bond. When you obtain a BMC-84, a surety company guarantees the FMCSA that it will pay up to $75,000 in case you (the freight broker or forwarder) fail to comply with your financial obligations. If a claim is made against your bond, the surety will pay it initially, but you are responsible for reimbursing the surety.
      • BMC-85:

        This is a trust fund agreement. You must deposit $75,000 into a trust fund. This amount is used to pay any valid claims against your brokerage. Unlike the BMC-84, there's no third-party surety involved, and the funds are directly accessible for claims.

    Financial Considerations

      • BMC-84:

        Generally requires a lower upfront cost, usually a percentage of the $75,000 bond amount annually, depending on your credit score and business financials.
      • BMC-85:

        Requires you to have $75,000 in liquid assets to place into the trust. This can be a significant upfront financial commitment, but there are no annual premiums.

    Credit and Financial Health

      • BMC-84:

        Your credit score and financial history are important. A better credit score usually means a lower premium.
      • BMC-85:

        Ideal for those who may not have the best credit score or who prefer not to undergo a credit check, as the full amount is placed in trust.

    Risk Tolerance

      • BMC-84:

        Involves a third party (surety), which adds a layer of protection but also means you owe the surety if a claim is paid out.
      • BMC-85:

        Directly exposes your funds to claims, but you don't have to worry about premiums or surety involvement.

    Frequently Asked Questions

    1Are Claims Processed In-House?
    Yes, PFA Transportation Insurance & Surety Services is a licensed claims adjuster for financial institutions authorized by the Federal Motor Carrier Safety Administration (FMCSA). We specialize in claims processing of BMC-84 Surety Bonds and BMC-85 Trust Agreements. We have represented commercial banks and financial institutions since 1995 and currently handle more than 15,000 claims per year. We are experts at what we do! Our dedicated staff is here to assist in expediting the claims process and can effectively act as a middleman between the claimant and the broker.
    2What Is The Process For a Claim to be Filed Against a Broker?
    Claimants (carriers, shippers, and/or authorized third parties) first need to provide some basic information: the MC # of the broker, your carrier’s MC # and contact information (including email and phone number), the date(s) the load(s) picked up and the total dollar amount owed. This can be accomplished by going to our website at PFAprotects.com, scrolling down to the bottom of the main page and clicking on the big green bar that states “Submit a BMC-84 or BMC-85 Claim Here”. Upon the initial submission online, an email with a status update will be sent to the email address provided. Should your load(s) qualify, the email will contain login information to our claimant portal where you must provide additional load details as well as upload the required supporting documentation: rate confirmation, bill of lading, and carrier’s invoice for each load you wish to submit. Upon completion of the process, our claims staff will verify the information provided. We work directly with our active brokers to get valid claims paid quickly. In 95% of the claim inquiries, the broker pays the claimant after being informed a claim has been filed against their surety. If pending claims total more than the $75,000 surety instrument, or if the broker stops communicating with us, or if the broker stops providing timely payments to the claimant, we will recommend the Surety issue a “Notice of Cancellation”. The FMCSA allows brokers to operate for an additional 30 days after the filing of a Notice of Cancellation. We must accept claims against a cancelled broker’s surety instrument for 60 days after their effective cancellation date with the FMCSA. If a broker is not reinstated and their claims continue to multiply, we will not be able to determine the amount each claimant will receive until after the application period has expired. Payouts are conducted in one of two ways: Full claim payout – claims did not exceed the surety instrument and all valid claims are paid in full. Pro rata payout – each valid claimant is paid a pro-rata percentage of what they are owed.
    3What is the Difference Between a Bond and a Trust Agreement?
    The FMCSA requires a $75,000 surety instrument be filed for a transportation broker’s license. Both the BMC-84 (“bond”) and the BMC-85 (“trust agreement”) fulfill this requirement. The basic difference between the two is that a BMC-84 is issued by an insurance company while a BMC-85 is issued by a financial institution. An insurance adjuster may see thousands of claims per year, but only a handful of those claims will involve a BMC-84. The claims adjuster’s lack of experience in BMC-84 and BMC-85 claims, total volume of other claims, and lack of accountability to the policy holder because of their discretion over the corpus of the bond inevitably leads to claims being paid too quickly and to the detriment of both the broker and other valid claimants. At PFA Transportation Insurance & Surety Services, we only handle claims against BMC-84 and BMC-85 surety instruments. We faithfully uphold our fiduciary obligation to investigate all submitted claims. Proper investigation and adherence to the principles of good faith and fair dealing help prevent fraudulent claims getting paid and monies remain available to pay valid claims.
    4Does Pursuing a Claim Against a BMC-84 or BMC-85 Surety Instrument Mean Forgoing Other Avenues of Recovery?
    If the amount of claims received exceeds the $75,000 surety instrument, it is not possible for a Surety to fully compensate all valid claimants. Claimants often seek multiple options for recovery. We ask that claimants contact us if they receive payment from another source so that we can record any full or partial payments against the total amount due on a claim. In some instances, carriers unable to collect the full amount of freight charges from the surety instrument can proceed collaterally against the underlying shipper or consignee. You should contact legal counsel in your State to determine if that option is available in your circumstances.

    What You Need. When You Need It.

    BMC-84 / BMC-85

    (Required for Freight Broker Authority)

    We have several pricing and payment options for BMC-84 Surety Bonds and BMC-85 Trust Agreements since 1998. We keep track of every claim from start to finish by constantly processing the required paperwork and communication until it is closed.


    Get the right coverage and secure the most competitive rates. When it comes to protecting your business, few insurers offer all of the different lines of insurance that a domestic freight broker and/or freight forwarder needs. We are here to offer you intelligent insurance solutions on every front.



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