Kentucky Freight Broker Bond

When operating as a freight broker in Kentucky, securing a freight broker bond is an essential step—but it’s important to note that this is primarily a federal requirement enforced by the FMCSA, not a state-specific rule. Kentucky follows the federal regulations, so brokers must comply to legally operate across the U.S.

While the requirement comes from federal law, Kentucky freight brokers must obtain the bond to legally broker shipments. The bond helps protect shippers and carriers operating in Kentucky by providing financial recourse in cases of non-payment or contract violations. Compliance with the freight broker bond requirement also ensures that brokers are officially recognized by the FMCSA, allowing them to operate legally within Kentucky and nationwide.

Freight brokers in Kentucky must meet specific licensing and bonding requirements to operate legally. The FMCSA requires every broker to secure a $75,000 surety bond before receiving their Motor Carrier (MC) number and operating authority (FMCSA, 2024).

To qualify, brokers must:

• Submit an application to the FMCSA via the Unified Registration System (URS).
• Designate a process agent using Form BOC-3.
• Obtain a $75,000 Freight Broker Bond from an approved surety provider.

The bond ensures brokers comply with both federal standards and any state-specific rules Kentucky enforces. Unlike an insurance policy, it does not protect the broker but the shipper and carrier in case of payment default.

Kentucky freight brokers must comply with federal FMCSA standards, including the $75,000 BMC-84 bond. The state does not impose an additional bond requirement, but brokers must meet general business and tax obligations, such as:

• Registering their business entity with the Kentucky Secretary of State
• Obtaining applicable state tax IDs
• Ensuring overall compliance with Kentucky business and transportation regulations

Brokers do not need a separate state-level freight broker bond, but maintaining proper registration and tax compliance is essential to avoid penalties.

The cost of a Kentucky Freight Broker Bond depends on the applicant’s credit, financial history, and experience. Although the bond amount is fixed at $75,000, brokers only pay a percentage of that amount—known as the premium.

Typically, the rate ranges from 1% to 5% of the bond amount:

• Good credit (700+): 1%–5% → approximately $750–$3,750 per year
• Poor credit (below 650): 5%–15% → above $3,750 per year

Working with an experienced surety agency can help brokers secure competitive rates and access programs designed for various financial profiles. To understand what influences your premium, see our detailed guide on surety bond cost.

Getting bonded in Kentucky involves a straightforward process that can be completed in a few steps.

1. Apply Online: Start by filling out the surety bond online application with your business and personal information.
2. Submit Required Documents: Provide your MC number (if already issued), financial statements, and proof of registration.
3. Underwriting Review: The surety reviews your application and determines your premium based on credit and business history.
4. Pay the Premium: Once approved, you’ll pay the premium rate and receive your bond certificate.
5. File with the FMCSA: The surety company files the bond electronically with the FMCSA under the BMC-84 form.

To learn more about the bonding process, visit our step-by-step resource on how to get bonded.

Yes. Even if you have low credit, you can still qualify for a Freight Broker Bond. Many surety agencies, including Lance Surety Bonds, offer bad credit bonding programs that consider other factors such as business experience, collateral, and payment history.

Tips to improve approval chances include:

• Submitting updated financial statements
• Demonstrating stable business income
• Paying off small debts to boost credit score
• Choosing an established surety that specializes in transportation bonds

While rates for bad credit applicants are higher (typically 5–15%), working with a reputable surety provider can help you get bonded quickly and possibly lower your rate over time as your credit improves.

Freight broker bonds must be renewed annually to maintain compliance with FMCSA regulations. Sureties typically send renewal reminders 30–60 days before expiration to ensure continuous coverage.

Renewing your bond is simple:

• Review your renewal quote from your surety provider
• Pay the renewal premium before the expiration date
• Confirm that your bond remains on file with the FMCSA

Failing to renew on time can lead to suspension or revocation of your broker authority. Maintaining continuous bond coverage ensures uninterrupted operations and avoids costly reinstatement fees.

What happens if a claim is filed against my bond?

If a shipper or carrier files a valid claim, the surety will compensate them up to the $75,000 bond amount. However, the broker is responsible for reimbursing the surety for any paid claims. Timely dispute resolution and maintaining accurate payment records help minimize claim risk.

How long are Kentucky Freight Broker Bonds valid?

Freight Broker Bonds are valid for one year from the effective date and must be renewed annually to maintain FMCSA authority. Renewals ensure continuous financial protection for shippers and carriers.

Can the bond be transferred if ownership changes?

No, Freight Broker Bonds are tied to the specific entity listed on the bond. If a brokerage changes ownership or business structure (such as from LLC to corporation), a new bond must be issued under the updated legal name.

Are there options for multi-year bond payments?

While FMCSA requires annual bond renewal, some surety companies offer multi-year payment plans or financing options. These arrangements can help manage cash flow and ensure continuous compliance.

The Kentucky Freight Broker Bond is essential for legal operation and credibility in the transportation industry. It protects clients, builds trust, and ensures brokers follow federal and state regulations. Whether you’re a new broker applying for your first bond or renewing an existing one, working with an experienced surety agency helps you stay compliant and secure the best possible rate.

Federal Motor Carrier Safety Administration. (2024). Freight Broker Authority (BMC-84 Bond Requirements). Retrieved from
https://www.fmcsa.dot.gov/registration/freight-broker-authority

Kentucky Legislature. (2024). Kentucky Transportation Cabinet Regulations. Retrieved from
https://apps.legislature.ky.gov/

Lance Surety Bonds. (n.d.). How to get bonded. Retrieved from
https://www.lancesuretybonds.com/learn/how-to-get-bonded

Lance Surety Bonds. (n.d.). How much does a surety bond cost in 2025? Retrieved from
https://www.lancesuretybonds.com/learn/surety-bond-cost

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