eHow launches Android app: Get the best of eHow on the go.

How To

How to Verify a Freight Broker Bond

Contributor
By eHow Contributing Writer
(4 Ratings)

If you're new to working with freight brokers, you may be confused about the role of their surety bond. From the Carrier's standpoint, the surety bond is in place as protection in case the broker refuses to pay for services rendered. Always verify a freight broker's bond before accepting a load. Read on to learn more.

Difficulty: Easy
Instructions
  1. Step 1

    Visit the Federal Motor Carrier Safety Administration (FMCSA) website. Go to the Licensing and Insurance section and choose Carrier Search from the drop down menu. (You can also bookmark the link in our Resources section below).

  2. Step 2

    Enter the freight broker's information. It isn't necessary to fill out the entire form. If you have the Motor Carrier (MC) or Freight Forwarder (FF) number, no other details are necessary. If you don't, fill in as much information as you can. Hit "Search."

  3. Step 3

    Choose the correct broker from the formulated list. Click on "Report." (HTML shows a snapshot of some pertinent information. Report provides full FMCSA information about the broker in PDF format).

  4. Step 4

    Note the Authorities section. Freight brokers must have current brokerage authority for their surety bond to be valid. Be sure the broker authority listed is active; with no application pending. If the broker authority status is listed as None or Inactive, the company has no current legal standing as a freight broker. Don't take the load; the broker bond (if any) won't be enforceable.

  5. Step 5

    Drop down to the Insurance Requirements section. Look for bond insurance. If the freight broker is acting in accordance with federal law, it will list bond insurance as both required and on file. It will also show the current federal minimum requirement of a brokerage surety bond. (Note: Some brokers voluntarily purchase a larger bond. The federal minimum will show regardless of actual bond value).

  6. Step 6

    Look down the page at Active and Pending Insurance. Verify a listing for an active broker bond. (Note: If the freight broker has changed insurance companies, cancelled bonds will also show on this form).

  7. Step 7

    Call the insurance carrier to clarify coverage if desired. Many trucking companies find this step unnecessary, because the insurance company is required by law to notify the FMCSA if coverage ends. However, a short time lag can be possible between a bond lapse and an FMCSA update. If you want to be 100% certain the bond is in effect, note the bond number and use the insurance contact information on the form.

Tips & Warnings
  • If you ever need to file against a brokerage bond, don't hesitate. Broker bonds can only cover a limited number of claims.
Subscribe

Post a Comment

Post a Comment

Related Ads

  • Have you done this? Click here to let us know.
I Did This
Get Free Business Newsletters

Copyright © 1999-2009 eHow, Inc. Use of this web site constitutes acceptance of the eHow Terms of Use and Privacy Policy .   en-US Portions of this page are modifications based on work created and shared by Google and used according to terms described in the Creative Commons 3.0 Attribution License. † requires javascript

eHow Business
eHow_eHow Business and Finance