Understanding The Freight Broker Surety Bond
There is an abundance of companies, within Canada, that transport freight from one location to the next. If you run a similar type of company, you have more than likely familiarized yourself with the freight broker surety bond. If you’re new to the industry, you will want to learn about this type of surety bond right away, since it is truly a necessity for all freight transporters. Below, you will learn about the importance of this type of bond for shippers and motor carriers.
What Is The Freight Broker Surety Bond?
Now, you should take the time to learn about this specific type of bond. This license bond is required and must be obtained, before the shipping company will be able to acquire their license. This means that you will not be able to carry out your duty and begin generating money, until you’ve obtained the bond and the associated licensure. This bond helps to validate the company’s financial responsibility, while also guaranteeing that they’ll be able to pay their shippers and motor carries. If you fail to abide by the contractual agreement and do not pay these entities, the bond will help to ensure that these individuals are covered for their losses.
Understanding The Rates
When attempting to obtain a freight broker surety bond, the price will undoubtedly be integral to your final decision. The truth of the matter is that the rates are not universal and will vary substantially from one corporation to the next. In order to obtain this type of bond and maintain its validity, you will need to pay annually. The annual fee is determined by looking at a number of different factors, including the company’s history, the owner’s credit, and the company’s financial stability. With this in mind, companies, which are deemed to be less risky, will generally be able to obtain much more favorable fees, when compared to companies that are deemed riskier.
Can Individuals With Bad Credit Obtain A Freight Broker Surety Bond?
If you have bad credit, you may already have concerns. Although it may be a little more difficult and strenuous to obtain this type of bond with bad credit, doing so is not impossible. In fact, there are some surety companies like ConstructionBond, which hold a 99% approval rating. Just remember that your credit will play a major role in determining the overall fees. With this in mind, those that have better credit will receive more favorable fees and vice versa.
Dealing With Claims
You should understand that freight broker surety bond claims are always taken incredibly seriously. If you have a claim filed against your bond, you will want to immediately make contact with your designated bond agent. This individual will be able to provide you with additional information regarding the claim, including who filed it and why. Once you’ve obtained this information, you should contact the entity or individual that filed the claim. Working out the problem with this individual is highly recommended.
In many cases, poor communication will lead directly to the claim and speaking with the claimant may very well give you the ability to put an end to the claim, before it can proceed further.
Those Hauling Freight To The US
If your company hauls freight from Canada to the United States, you will need to obtain additional surety bonds. This is the not the case, if your company only transports goods within the country of Canada. In order to legally carry freight between Canada and America, you will need to obtain a $75,000 surety bond with the FMCSA. Obtaining your own USDOT number is also required. Remember that this isn’t a necessity, if your trucks remain within Canada.
The Freight Broker Surety Bond is a requirement for freighting companies. Now that you’ve learned everything you need to know, you can now go out there and obtain your own bond and begin earning revenue for your business.