Set up a freight brokerage and the first number you hear is $75,000. That's the surety bond FMCSA requires to get broker authority, and it's real, but it's also the smallest part of protecting your business. A bond is a guarantee to other people that you'll pay what you owe. It does nothing for you when a shipper sues you over a lost load, a carrier you hired causes a wreck, or you make a paperwork mistake that costs a customer real money. Here's what a broker actually needs to carry, and why it's different from what the carriers you dispatch are required to buy.

The $75,000 bond (or trust) is the license, not the insurance

To get and keep broker authority, FMCSA requires proof of financial responsibility in one of two forms: a surety bond (BMC-84) or a trust fund agreement (BMC-85), each set at $75,000. Almost every broker goes the bond route, because a trust fund means parking $75,000 of your own cash, while a bond costs an annual premium that's a small fraction of that.

Either way, the money exists to pay claims made against you, not claims you make. If you fail to pay a carrier for freight they hauled, or you're found to have violated broker regulations, the bond (or trust) is what a carrier or shipper draws against to get made whole. Draw it down and your authority gets suspended until it's restored to the full $75,000. That's the mechanism: it's a financial guarantee the federal government requires so the people you do business with have recourse, not a policy that pays you back when something goes wrong on your end.

You're a broker, not a carrier, and that changes what's required

This trips people up who came out of the carrier side of trucking. A motor carrier has to carry auto liability with a BMC-91X filed with FMCSA before its authority goes active, because a carrier is the one physically operating trucks on the road. A broker doesn't touch a truck. You arrange for someone else to haul the freight, so there's no BMC-91X requirement and no federally mandated auto liability limit sitting on your desk. If a vendor or a shipper's compliance department asks why your certificate doesn't show a BMC-91X filing, that's the answer: it doesn't apply to a broker operation. We cover the carrier-side version of this distinction, and why a cheap general liability quote can't substitute for it either, in auto liability vs. general liability for trucking.

That doesn't mean a broker is done with insurance once the bond is filed. It means the coverage you need answers a completely different question: not "am I legal to drive," but "what happens to my business when the carrier I hired doesn't come through."

Talk to an agent about your brokerage's coverage

Contingent cargo: the backstop when the carrier's policy doesn't pay

Every load you broker rides on the hauling carrier's own motor truck cargo policy, which is exactly why carriers are asked to show $100,000 in cargo coverage on their certificate before they get a load, a standard we break down in cargo insurance requirements. The problem is that a certificate isn't a guarantee. Cargo policies lapse. Some are named-peril forms that exclude the exact way a load got damaged. Some carriers hand you a certificate for coverage that quietly cancelled the week before.

Contingent cargo coverage is what pays the shipper's claim when the carrier's cargo policy fails to respond, for any of those reasons. It sits behind the carrier's policy and only pays if that policy doesn't. Without it, a broker facing a lost load and an uninsured carrier is negotiating a claim out of pocket, or facing a shipper who never books with them again. With it, the shipper gets made whole and the broker's relationship survives the claim. It's the single coverage most directly tied to keeping shipper contracts, because a shipper who's been burned once by an uninsured carrier will require proof of contingent cargo on every broker they use afterward.

Contingent auto liability: covering what the carrier's auto policy misses

The same logic applies to the wreck itself. If a carrier you hired causes an accident and their auto liability limit is too thin to cover the injury claim, or their policy has lapsed, or a coverage dispute delays payment, the injured party's attorneys don't stop at the carrier. They look at the broker who selected that carrier, and "negligent selection" and "negligent hiring" claims against brokers have become a routine part of freight litigation, not a rare exception.

Contingent auto liability responds when the hired carrier's own auto liability doesn't, filling the gap so the broker isn't left absorbing a bodily injury or property damage claim that arose from someone else's truck. It's the coverage most directly aimed at that negligent-selection exposure, which is exactly why more shippers now ask brokers to prove it exists before signing a contract, the same way they'd verify a carrier's certificate of insurance before dispatching a load.

Get contingent cargo and contingent auto quoted for your brokerage

Errors and omissions: covering your mistakes, not the carrier's

Contingent coverages protect you when the carrier fails. Errors and omissions (E&O), sometimes sold as broker's professional liability, protects you when you fail. Booked the wrong equipment type for a temperature-sensitive load. Missed a pickup window that caused a shipper's product to spoil. Dispatched a carrier without verifying their authority was active. Made a rate or paperwork error that cost a customer money. None of those are bodily injury or property damage, so general liability doesn't answer them, and none of them involve a truck on the road, so contingent cargo and contingent auto don't either.

E&O covers the financial loss that comes from a mistake in how you did your job as a broker: the judgment call, the paperwork, the carrier vetting. As freight brokerage has gotten more scrutiny from both shippers and plaintiffs' attorneys, E&O has moved from optional to something most serious shipper contracts specifically require, alongside contingent cargo and contingent auto.

General liability: the ordinary business coverage

Underneath all of the above sits general liability, the same coverage almost any business carries: a visitor gets hurt at your office or warehouse, you damage a customer's property while you're on-site, a claim arises out of your ordinary business operations that has nothing to do with a load on a truck. It's not the coverage that makes a brokerage unique, but it's usually the cheapest of the four and it rounds out the certificate that shippers and carriers expect to see.

Why shippers keep adding these to the contract

None of the four coverages above are federally required the way the $75,000 bond is. They're required by the market: shippers who've been burned by an uninsured carrier, or sued alongside a broker after a bad hiring decision, write contingent cargo, contingent auto, and E&O straight into their broker contracts now. A brokerage that only carries the bond can technically operate, but it will lose contracts to brokerages that can hand over a certificate showing all four coverages the first time a shipper's risk department asks. Getting the package in place before a shipper asks, rather than scrambling when a contract review flags the gap, is the difference between a fast onboarding and a stalled one.

How McClure helps

We quote the full package a freight brokerage actually needs: the BMC-84 bond to get your authority filed, plus contingent cargo, contingent auto liability, general liability, and E&O sized to your actual freight volume and customer contracts, not a generic template. Send us your brokerage's details and we'll map out exactly what your shipper contracts are likely to require before the request comes in.