Colorado Freight Broker Bond

The Colorado Freight Broker Bond is a critical requirement for freight brokers and freight forwarders operating in the state. However, it’s important to note that this bond is primarily a federal requirement, mandated by the Federal Motor Carrier Safety Administration (FMCSA), rather than a state-specific rule.

A Freight Broker Bond, also called a BMC-84 bond, is a financial guarantee that ensures freight brokers operate responsibly and fulfill their contractual obligations. It protects shippers and carriers by providing compensation if a broker fails to pay carriers or violates FMCSA regulations.

While the bond requirement originates at the federal level, Colorado enforces compliance to ensure that brokers conducting business within the state are properly bonded. This protects local carriers and shippers, promotes ethical business practices, and maintains trust in Colorado’s freight and logistics industry.

Freight brokers in Colorado must secure a $75,000 surety bond (BMC-84), a federal requirement mandated by the FMCSA, to operate legally. While Colorado does not require a separate state bond, brokers must comply with FMCSA regulations to maintain active operating authority.

Key Requirements:

• Active FMCSA broker authority — brokers must be registered and licensed through FMCSA.
• Proof of financial responsibility — eligibility is influenced by creditworthiness, business experience, and absence of violations.
   

Working with a trusted surety provider streamlines the application, approval, and filing process.

Colorado aligns with federal FMCSA rules, requiring brokers to maintain a $75,000 bond, while also emphasizing compliance with local regulations, including:

• Timely renewals of the bond to maintain active operating authority
• Accurate record-keeping for transactions and financial reporting
• Monitoring and audits in cases of claims or compliance concerns
   

These provisions ensure robust protection for shippers and carriers while keeping brokers aligned with federal requirements.

The cost of a Colorado Freight Broker Bond (BMC-84) depends on credit score, financial history, and business experience. Premiums for the $75,000 bond typically range:

• Good credit (700+): 1–5% of the bond, around $750–$3,750 per year
• Poor credit (below 650): 5–15% of the bond, up to $11,250 per year
   

Brokers with excellent credit secure lower rates, while higher-risk applicants pay more. Other factors affecting cost include prior claims, length of business operations, and overall financial stability.

Obtaining a bond involves applying through a surety provider, submitting financial documents, and meeting FMCSA requirements.
To get a Colorado Freight Broker Bond, follow these steps:

• Apply: Submit a surety bond online application with a reputable surety provider.
• Provide Documentation: Include business financials, credit reports, and FMCSA license & permit bond details.
• Choose a Provider: Select a surety like Lance Surety Bonds, known for competitive rates and fast approvals.
  The process typically takes 1-2 days for approval. Ensure all documents are accurate to avoid delays.

Yes, brokers with low credit scores can secure a Colorado Freight Broker Bond (BMC-84), though premiums are higher. For poor credit applicants, rates typically range from 5–15% of the $75,000 bond, or $3,750–$11,250 per year.

Tips to Improve Approval Chances:

• Provide detailed financial records to demonstrate business stability.
• Work with a surety experienced in high-risk freight broker bonds.
• Improve credit over time to qualify for lower rates.
   

Specialized surety providers, like Lance Surety Bonds, can help bad-credit applicants obtain coverage while ensuring compliance with FMCSA regulations.

Colorado Freight Broker Bonds (BMC-84) must be renewed annually to maintain FMCSA compliance. Most surety providers, including Lance Surety Bonds, send renewal reminders 30–60 days before expiration to help brokers stay on track.

Renewal Steps:

1. Review your bond status and renewal notice.
2. Update financial information or business details if required.
3. Pay the annual premium to maintain active coverage.

Timely renewal ensures uninterrupted operating authority and helps avoid costly reinstatement fees. Maintaining accurate records and a strong credit profile may also help reduce future renewal costs.

What happens if a claim is filed against my bond?

Claims may lead to payouts up to $75,000, with brokers responsible for reimbursing the surety.
If a claim is filed, the surety investigates to verify its validity. If valid, the surety pays up to $75,000 to cover losses, but the broker must reimburse the surety. Maintaining clear contracts and timely payments reduces claim risks.

How long are the Colorado Freight Broker Bonds valid?

Bonds are valid for one year and require annual renewal.
Colorado Freight Broker Bonds are effective for one year from issuance. Brokers must renew annually to comply with FMCSA regulations, with reminders typically sent by the surety provider.

Can the bond be transferred if ownership changes?

Bonds are non-transferable and require a new bond for ownership changes.
If a brokerage changes ownership, a new bond must be obtained. The original bond is tied to the initial applicant and cannot be transferred. Contact your surety for guidance.

Are there options for multi-year bond payments?

Multi-year payment options may be available, depending on the surety provider.
Some sureties offer multi-year bond terms, allowing brokers to lock in rates for 2-3 years. Check with providers like Lance Surety Bonds for availability and potential savings.

Federal Motor Carrier Safety Administration. (n.d.). Broker Registration. Retrieved from
https://www.fmcsa.dot.gov/

U.S. Small Business Administration. (n.d.). Apply for licenses and permits. Retrieved from
https://www.sba.gov/business-guide/launch-your-business/apply-licenses-permits

Lance Surety Bonds. (n.d.). Online surety bond application / Free quote. Retrieved from
https://www.lancesuretybonds.com/surety-bond-quote