A surety bond in the amount of $75,000 is required by the FMCSA under 49 CFR Part 387.307 for all licensed brokers of property. A Form BMC-84 is used to make the filing with the FMCSA and remains in effect until cancelled by the bonding company. The surety bond is used to ensure the financial responsibility of the broker by providing for payments to shippers or motor carriers if the broker fails to carry out its contracts, agreements, or arrangements for the supplying of transportation by authorized motor carriers.
Contingent Cargo Legal Liability
This type of policy is designed to protect a transportation broker or freight forwarder against the liability assumed when making arrangements to move cargo for others. Contingent Cargo Legal Liability provides coverage when a trucker’s primary motor truck cargo policy fails to assume the responsibility for cargo loss or damage. These policies respond to the legal liability that transportation brokers and freight forwarders assume under law.
Contingent Auto Liability
This policy is designed to protect against the liability assumed by transportation brokers and freight forwarders when the truckers that they have under contract are involved in accidents where bodily injury, death or property damage take place. Defense coverage will normally be provided in most policy forms and will provide for an attorney to be assigned by the insurance company to defend the transportation broker or freight forwarder. The policy will cover the cost of the attorney and if found liable, will pay the agreed settlement amount up to policy limits.
A policy designed to respond to the liability a freight broker could assume other than liability to cargo or liability as result of a vehicle being driven. For example if a third party trucker or warehouse personnel were injured as result of cargo being unloaded from a truck and the freight broker is dragged into a lawsuit. Defense coverage will normally be provided in most policy forms whereby attorneys will be assigned by the insurance company to defend the freight broker/forwarder and incur those costs and if found liable respond to the agreed settlement amount up to policy limits.