Do I need insurance if I already have the BMC-84 bond?

The bond and insurance do different jobs. The BMC-84 bond guarantees you pay carriers and protects against broker misconduct; it is not cargo or liability coverage. Insurance protects you and your shippers against cargo claims and lawsuits. Most serious shippers will ask for both.

Freight Broker Insurance Guide 2026: What You Actually Need

Q: Is insurance legally required to be a freight broker?

Federally, the only financial responsibility a broker must have is the $75,000 BMC-84 surety bond (or BMC-85 trust). Insurance like contingent cargo, contingent auto, general liability, and E&O is not required by the FMCSA, but shippers increasingly require it in their broker-shipper agreements before they will give you freight.

Q: How much does freight broker insurance cost?

A typical new broker package of contingent cargo ($100,000 limit) plus contingent auto liability runs roughly $1,200-$2,500 per year. Adding general liability and errors & omissions (E&O) can bring a full package to $2,500-$5,000 annually, depending on your volume and coverage limits.

Q: What is contingent cargo insurance?

Contingent cargo insurance pays for cargo loss or damage when the carrier's own cargo policy denies or fails to cover a claim. It protects the broker as a backstop and is one of the most commonly requested coverages by shippers, even though it is not federally mandated.

Quick Answer

Insurance is not federally required beyond the bond, but shippers will require it before giving you freight. Most brokers carry contingent cargo, contingent auto liability, general liability, and E&O, for a typical $2,500-$5,000 per year depending on limits and volume.

Bond vs Insurance: They Are Not the Same

The most common beginner mistake is assuming the $75,000 BMC-84 bond is insurance. It is not. The bond guarantees that you pay your carriers and operate honestly; it protects others from your conduct. Insurance protects you and your shippers from cargo claims, liability, and professional errors. You need the bond to be licensed, and you need insurance to win real shipper accounts.

The Four Coverages Brokers Carry

Contingent Cargo

$800-$1,500/yr

Backstops cargo loss/damage when the carrier's cargo policy denies or fails to pay. The most commonly requested broker coverage.

Often required by shippers

Contingent Auto Liability

$400-$900/yr

Covers bodily injury/property damage claims that reach the broker when the carrier's auto liability fails to respond.

Often bundled with cargo

General Liability (GL)

$500-$1,200/yr

Standard business liability for your operation (office, third-party claims). Frequently required in shipper contracts, often at a $1M limit.

Commonly requested

Errors & Omissions (E&O)

$800-$2,000/yr

Covers professional mistakes, such as booking the wrong carrier or a paperwork error that causes a financial loss.

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What Shippers Actually Ask For

When you sign a broker-shipper agreement, the insurance section typically requires a $1M general liability limit, $100,000 contingent cargo, and contingent auto liability. Larger shippers may require higher limits and that they be named as an additional insured. Having these ready is often the difference between winning an account and getting passed over.

How to Keep Costs Reasonable

Start with the coverages shippers demand most (contingent cargo plus contingent auto), then add general liability and E&O as you scale. Work with an insurance broker who specializes in transportation, bundle policies, and keep clean claims history. Your premiums drop as you build a track record.

Frequently Asked Questions

Is insurance legally required to be a freight broker?

No, only the $75,000 BMC-84 bond is federally required. But shippers require insurance in their contracts, so in practice you need it to operate.

How much does freight broker insurance cost?

A basic contingent cargo and contingent auto package runs roughly $1,200-$2,500/yr. A full package with GL and E&O is typically $2,500-$5,000/yr.

What is contingent cargo insurance?

It pays for cargo loss or damage when the carrier's own cargo policy fails to respond. It is a backstop that protects the broker and is one of the most requested coverages.