What do you have to do to become a broker?

Acting as a broker requires you to be properly registered with the FMCSA. Those operating as a broker for the first time must start by applying for a unique identification number with the United States Department of Transportation (USDOT). This requires navigating to the Unified Registration System (URS) and following the on-screen prompts. It is also necessary to obtain an MC number before moving on to complete specific forms to legally operate as a commercial transportation broker.

New broker paperwork

Becoming a new broker involves some paperwork. If you’re a new broker, the specific type of paperwork you will complete depends on the types of goods you for which you normally arrange delivery. Property brokers, for example, must obtain a Trust Fund Agreement or Surety Bond for a face value of at least $75,000 to meet Proof of Insurance Coverage obligations. The name of the form to complete for this task is BMC-85. Brokers of household goods must meet the same qualifications. The only difference is that you would complete Form BMC-84 instead of BMC-85.

A third form for new brokers is the BOC-3, called Designation of Process Agent. The FMCSA allows new brokers to designate themselves as process agents in the same state where they establish contracts with motor carriers.

truck insurance quotes

Fees and delivery expectations

As of February 2020, the fee to process a broker application is $300. This is non-refundable. You can expect it to take approximately four to six weeks to receive approval from the FMCSA to begin operating as a broker of property or household goods, so be sure to give yourself plenty of time to take care of this. All applications are available online in the form of a PDF. You should print the form, complete it, and send the original signed application to the FMCSA at 1200 New Jersey Avenue SE W63-105, Washington, D.C. 20590. The FMCSA will notify you of your application status by mail within the four to six-week timeframe.

Consequences for not registering as a broker with the FMCSA

There can be some pretty hefty consequences if you don’t have the proper registration. The FMCSA has the authority to impose a fine of up to $10,000 against all parties that act as a broker without completing official registration requirements. The potential fine for unregistered Brokers of Household Goods is up to $25,000. Unregistered brokers are also liable for third-party injury claims regardless of the amount. At any rate, it’s really important that you have the right operating authority and registration with the FMCSA.

We make it easy to meet your insurance requirements

The FMCSA requires all commercial drivers to carry the proper insurance coverage depending on where they normally drive and what they normally deliver. Our transportation insurance experts would be happy to help you get the trucking insurance you need to protect your business. We strive to make insurance easy and to help trucking businesses save money on their insurance. Get started with your quotes by filling out our online form, giving us a call, or messaging us on LiveChat.

Source 1Source 2Source 3

Leave a Comment