BMC-84 Surety Bond Bad Credit
A BMC-84 surety bond is a type of bond required by the FMCSA. It pays out compensation to claimants when they’re wronged by the actions of another party. The bond premium starts at 1% of the bond’s total amount, and the bond’s term is usually one year. When a claim occurs, the surety will perform an internal investigation, contact both parties and request written documentation.
For businesses that provide freight services, BMC-84 bonds are a necessity. They protect the public from fraud and failure to pay shippers. If a claimant does not receive compensation for damages, they can file a claim against the bond. The surety company will then pay the claimant up to the value of the bond, which can range from zero to seventy-five thousand dollars.
BMC-84 Surety Bond Bad Credit – Get A Quote Now
In order to comply with FMCSA regulations, motor carriers must have a BMC-84 surety bond and a trust fund. For a fee, bonding companies will put up the bond for a business. The cost of the bond varies according to the business owner’s credit profile, and the annual premium may be higher than the minimum amount.
In addition to BMC-84 bonds, freight broker bonds are required by the FMCSA. They’re required for transportation brokers that have contracts with motor carriers that perform interstate deliveries. The Federal Motor Carrier Safety Administration requires freight brokers to obtain a bond before they can get a license. While the penalties for failing to comply with these rules are high, the bonds protect shippers and motor carriers.
Before a freight broker can get a license, the FMCSA must issue a BMC-84 Freight Broker Surety Bond. This bond helps ensure that the freight broker pays carriers and provides recourse if payment is not made. The BMC-84 Surety Bond is submitted electronically to the FMCSA. Finding the right company to buy this bond can be difficult.
The applicant must provide basic financial information to secure the bond. The surety company will use this information to determine whether the applicant has the financial capacity to pay back the bond. If the application is successful, underwriting will take just a day or two. If you don’t have a good credit rating, you may need to apply for a higher premium rate.
While the rate of the bond may be high due to a challenging credit history, you can negotiate with the renewal department for a lower rate. If your financial status and credit rating have improved since your last renewal, the renewal department may be able to remarket your bond for a lower rate.
