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Freight Broker Insurance

Licensed freight brokers need more than the FMCSA-required BMC-84 bond. A complete broker program includes contingent cargo, contingent auto liability, errors & omissions, general liability, and cyber coverage. We place all 7 lines of broker coverage with A-rated carriers in one program β€” with one renewal date and one broker who understands the 3PL business.

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7 Coverages Every Freight Broker Needs

BMC-84 Surety Bond
Required by FMCSA
$75,000 minimum
Federal requirement for all licensed freight brokers. Protects motor carriers from non-payment by brokers. BMC-84 is the standard surety bond (most common); BMC-85 is a trust fund alternative requiring $75K held in an irrevocable trust.
Contingent Cargo Insurance
Shipper contract requirement
$100,000 minimum
Covers cargo loss when the motor carrier's primary cargo policy fails β€” denial, lapse, or insufficient limits. Brokers need this to satisfy shipper contract requirements and protect their business from motor carrier coverage failures.
Contingent Auto Liability
Shipper contract requirement
$1,000,000 minimum
Covers the broker when the motor carrier's primary auto liability fails to respond to a claim. Protects broker's vicarious liability if a carrier has insufficient coverage or denies the claim.
Errors & Omissions (E&O)
Best practice
$1,000,000 minimum
Covers professional liability β€” wrong carrier selection, misquoted rates, failure to verify insurance, lost paperwork, and dispatch errors. E&O claims have increased 40% over the past 3 years as nuclear verdicts trickle down to brokers.
General Liability
Recommended
$1,000,000 per occurrence
Covers premises and operations liability β€” office, terminal, or dispatch facility exposure. Also covers bodily injury or property damage at your location.
Cyber Liability
Recommended
$500,000–$1,000,000
Covers ransomware, data breach, phishing fraud, and wire transfer fraud β€” which has exploded in the freight broker industry. Brokers targeted by fake carrier phishing schemes lost $800M+ in 2024.
Workers Compensation
State law (employees)
Statutory
Required in every state for brokers with W-2 employees. Dispatcher and back-office staff are lower risk than motor carrier drivers but still require coverage.

Who Needs Freight Broker Insurance?

  • Licensed freight brokers with their own MC# (Broker Authority)
  • Freight forwarders operating under FF authority
  • 3PL companies arranging freight for shippers
  • Digital freight marketplaces connecting shippers and carriers
  • Freight agencies operating under a brokerage umbrella
  • Dispatch services that arrange loads for motor carriers

Freight Broker Insurance FAQ

What is the minimum insurance required to be a licensed freight broker?

FMCSA requires only one thing: a BMC-84 surety bond ($75,000) or BMC-85 trust fund ($75,000). However, shippers universally require additional coverage β€” contingent cargo ($100K minimum), contingent auto liability ($1M), errors & omissions ($1M), and general liability ($1M). A broker who carries only the BMC-84 will not get shipper contracts.

What is the difference between BMC-84 and BMC-85?

BMC-84 is a surety bond issued by a licensed surety company β€” you pay a premium (typically $900-$3,500/year) and the surety guarantees $75K to motor carriers for non-payment claims. BMC-85 is a trust fund where you deposit $75,000 in cash/investments into an irrevocable trust managed by a financial institution. Most brokers choose BMC-84 because the premium is far less than tying up $75K in cash.

How much does a BMC-84 surety bond cost?

BMC-84 premiums range from $900 to $3,500 per year depending on the broker's credit score, business age, and financials. New brokers with credit scores below 650 often pay the highest rates and may be required to post collateral. Brokers with 700+ credit and 2+ years in business typically pay $900-$1,500.

Do I need contingent cargo insurance if I only book loads with insured carriers?

Yes. Contingent cargo protects you when a carrier's primary policy fails β€” denial due to policy exclusions, lapse, or the carrier disputes coverage. Without contingent cargo, a denied carrier claim lands in your lap. This is one of the most common ways small brokers go out of business.

What is errors & omissions insurance for freight brokers?

E&O (also called professional liability) covers the broker's professional mistakes β€” booking a load with an uninsured carrier, misquoting rates that fail to deliver, losing paperwork that causes a claim denial, dispatching the wrong carrier, or failing to verify required insurance. E&O is critical because motor carrier and shipper contracts increasingly hold brokers liable for these errors.

How do freight broker insurance costs compare to motor carrier insurance?

Freight broker insurance totals typically $3,500-$8,500 per year: $1,000-$2,500 BMC-84 bond, $800-$1,500 contingent cargo, $800-$1,200 contingent auto, $1,200-$2,500 E&O, $600-$1,200 GL, $500-$1,000 cyber liability. Motor carriers running their own trucks pay 3-5x this amount ($12K-$18K per truck). Brokers arrange freight without owning trucks, so their exposure and premiums are lower.

Can Full Coverage help me get my freight broker authority?

Yes. We work with brokers from day one β€” writing the BMC-84 bond required for FMCSA approval, placing contingent cargo and auto liability, and adding E&O as soon as you start booking loads. New brokers without operating history still get competitive rates, though approval can require financial documentation for the BMC-84.

What happens if my BMC-84 bond is cancelled or lapses?

FMCSA immediately notifies the public on SAFER and flags your authority as non-compliant. You have 30 days to replace the bond or your broker authority is revoked. Claims filed during the 30-day grace period still fall to the bond you had in place at the time. Never let your BMC-84 lapse β€” it is the single most important piece of coverage for a freight broker.

Get Your Freight Broker Insurance Quote

We write complete broker programs: BMC-84 bond, contingent cargo, contingent auto liability, E&O, GL, and cyber β€” all through one broker, one renewal date.

Get a Free QuoteCall 317-427-5599