What is a broker bond?

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Bond broker is a type of guarantee of the agent used by intermediaries who act between a person or company that needs transportation for transport and a company that physically transports it. The basis of the bond is that the issuer of bonds guarantees that the intermediary for the transport will fulfill its obligations to both the owner of the freight transport and the transport companies. The issuer charges a fee, usually in the range of 0.5-2% of the amount that was guaranteed. The cargo agent must have such a bond to legally operate in the United States. The bond organization guarantees that it will pay money if the main person who is scheduled to pay money will not do so. If this happens, the bond issuer, known as the guarantee, then goes to the director to get the money. Although it may seem like a form of insurance, there is an important difference. Sureto Bond, the warranty has the same rights to pursue debt as if they were a creditor or a creditor; The insurer has limited rights to obtaineating your money.

In the case of a broker bond for a transport broker, the director is not a customer who pays for transport services. Instead, he is the director of the transport broker. He pays the issuer for the bond, although of course they can build a bond cost of charges charged to the cargo owner, transport company or both.

Bond broker for freight transport was previously called Interstate Commerce Commission Bond or a simple ICC bond. Today it is also referred to as the BMC 84 Bond. Another name is a bond of real estate broker. This is because the "property" is a legal term used by the federal management of motor carriers for referring to a broker.

Due to the high level of claims in recent years, the tlicers to obtain a bond for brokers have become stricter. Some brokers will not have sufficiently strong credit records to qualify for standard debtDescription for brokers. One option is to go for a high -risk warranty bond that has higher rates. Another option is the BMC-85 or Broker Trust Fund. This is where the money paid brokers pass to the central fund, which is used to pay if the broker fails to fulfill his duties.