Contingent cargo and surety bond info

T

Thebroker

New Member
1
hey everyone

we are a freight brokerage and have our contingent cargo/ error and omissions policy, as well as our 75 K ( $ 3000 annually surety bond ) with CG & B.

I've been getting calls and reading about BMC-84 broker surety for around $ 1000... wondering if anyone has heard of this as its $ 2000 cheaper than what we are paying, but not sure its legit.

also curious which insurance companies other brokers are using for their policies !

cheers !
 
bubba-one

bubba-one

Site Supporter
15
I also would like to know who's offering this for a $1000. My Canada customs bond for $25,000 cost me $325, so 3 x this amount give me $75,000 for $975.00 correct, but the bill still reflects $3000
 
loaders

loaders

Site Supporter
30
Canada customs bond and US property broker bonds are 2 different things. The 75K brokers surety bond is a measure of the broker's ability to cover a 75k claim against them. In other words, do you have the financial resources to respond to a carriers claim for non payment? If you do, expect to pay approx. 3k per year after you have submitted your year end financials for the insurance company's review. Like it, love it, hate it, it is a cost of doing business if you are a legitimate freight broker. If you can't play by the rules.........why play the game? A carrier who elects to do business with a broker who does not have a US property broker's licence (AND THEREFORE NO SURETY BOND) has no one to blame but themselves, when they have to scramble for payment of their invoices. Legitimate brokers have US authority, and the bond that goes with it. The good ones also have contingency cargo insurance, errors and omissions policies, and are members of a recognized trade association like the National Transportation Brokers Association or the TIA.
The real serious ones, abide by the Ontario Highway Traffic Act and maintain a"trust fund" to segregate their receivables. As usual...."I need this carrier ( who I've never dealt with before) on a Friday afternoon because there is no one else close".....or " I don't know this broker, but he has a return load 50 miles from where I unload on Saturday morning". Funny thing about business.....there's always an element of chance.
 
loaders

loaders

Site Supporter
30
In a nutshell Michael, that's exactly the problem. There are too many firms out there that believe the brokerage industry is "easy". No licences, no bond, no insurance, and therefore no overhead, just a handful of customers (usually uneducated ones) and a phone. It is unfortunate that those firms are the source of many of the posts on this site for non-payment of invoices, double brokering, unjustified rate deductions, and unethical business practices, etc. As a result, the legitimate brokers, of which there are many, get tarred with the same brush when the discussion turns to the brokerage industry. The sooner they can't find trucks for their loads, the sooner their customers will have to look for the services of legitimate carriers and professional brokers.
 
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