In the world of freight shipping, trust matters. Whether you’re moving goods across states or managing large-scale logistics, you need to know that your broker is financially responsible and compliant with regulations. That’s where surety bonds and trust fund agreements come into play. These tools protect shippers by ensuring brokers meet their financial obligations.
In this post, we’ll break down the difference between BMC-84 surety bonds and BMC-85 trust funds, why they matter, and how Torro Freight a trusted freight brokerage company uses them to keep your freight moving with confidence.
What Is Freight Broker Financial Responsibility?
Before a freight broker can legally operate in the U.S., they must meet certain financial responsibility requirements set by the Federal Motor Carrier Safety Administration (FMCSA). This is meant to protect shippers and carriers from unpaid claims or losses.
The FMCSA gives brokers two options to meet this rule:
- BMC-84 Surety Bond
- BMC-85 Trust Fund Agreement
These financial guarantees make sure the broker can cover claims if they don’t pay carriers or meet contract terms. Whether you’re shipping once a month or every day, working with a broker that meets these standards gives you an extra layer of protection.
What Is a Surety Bond (BMC-84)?
A surety bond is a type of agreement involving three parties:
1. The Broker – who needs the bond
2. The Surety Company – who issues the bond
3. The FMCSA/Shippers – who are protected by the bond
With a BMC-84 bond, the surety company promises to pay claims up to $75,000 if the broker fails to meet their responsibilities. After paying, the surety will try to recover the money from the broker. This is the more popular option because it doesn’t require brokers to set aside their own full $75,000. Instead, they pay a yearly fee to a bonding company.
What Is a Trust Fund Agreement (BMC-85)?
A trust fund agreement is the second way to meet FMCSA’s requirement. In this case, the broker places $75,000 of their own money into a trust account. This account is managed by a third-party financial institution and held in trust for shippers and carriers.
The BMC-85 trust fund gives direct access to those funds in case of a valid claim. There’s no surety company involved, which can mean faster payments if a broker defaults. While this option shows strong financial commitment, not all brokers have the capital to lock away $75,000. That’s why fewer companies choose it.
Also Read: https://torrofreight.com/tms-supports-shippers-pursuit/
Key Differences Between Surety Bonds and Trust Funds
For shippers, the biggest concern is whether the broker has the financial strength to resolve disputes. Both methods offer protection, but trust fund agreements may provide faster access to funds during claims.
| Feature | BMC-84 Surety Bond | BMC-85 Trust Fund |
|---|---|---|
| Money Required | Small fee (not $75,000 up front) | Full $75,000 deposit |
| Who Handles Claims | Surety company | Trust administrator |
| Risk to Shippers | Depends on surety’s response | Direct access to funds |
| Broker Preference | More common | Less common, but shows financial strength |
Why It Matters for Shippers?
When a broker fails to pay a carrier, the shipper might get caught in the middle. If that broker doesn’t have the right freight broker financial responsibility in place, it can delay your delivery or worse, cost you money.
Knowing whether your broker is covered by a surety bond or trust fund agreement helps you:
- Trust the freight process
- Avoid liability for unpaid carriers
- Reduce delays in your supply chain
- Feel confident during disputes or claims
How Torro Freight Ensures Financial Integrity?
At Torro Freight, we understand that financial trust is the foundation of great freight service. As a leading freight brokerage company, we meet all FMCSA financial responsibility requirements and work closely with carriers and shippers to ensure smooth transactions.
We provide full transparency about our freight brokerage services, including how we manage claims, protect shipper interests, and partner with trusted freight carriers. Whether through a surety bond or trust fund, we make sure your cargo and your business is protected.
We also use advanced tools like a Transportation Management System (TMS) to keep freight moving efficiently and manage compliance with industry regulations.
Conclusion
Understanding the difference between surety bonds and trust fund agreements is key for anyone working with a freight broker. These tools ensure brokers stay financially accountable and protect shippers from unnecessary risk.
At Torro Freight, we take our role as a trusted freight brokerage company seriously. Whether you’re shipping one load or managing a full supply chain, you deserve peace of mind. Ready to ship with confidence? Partner with Torro Freight where compliance, reliability, and trust are always delivered.
