North Carolina Transportation Broker Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a North Carolina Transportation Broker bond
At a Glance:
- Lowest Cost: $188 per year or $19 per month
- Bond Amount: $5,000
- Who Needs it: All transportation brokers operating in North Carolina
- Purpose: To ensure the public will receive compensation for financial harm if the broker fails to comply with licensing law
- Who Regulates Transportation Brokers in North Carolina: The North Carolina Utilities Commission
Background
North Carolina Statute 62-263 requires all transportation brokers operating in the state to obtain a license from the Utilities Commission. The North Carolina legislature enacted the licensing requirement to ensure brokers engage in ethical business practices. To provide financial security for the enforcement of the licensing law, transportation brokers must purchase and maintain a $5,000 surety bond to be eligible for licensure.
What is the Purpose of the North Carolina Transportation Broker Bond?
North Carolina requires transportation brokers to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that the public will receive compensation for financial harm if the broker fails to comply with the regulations outlined in North Carolina Statute 62-263. Specifically, the bond protects the public if the broker engages in acts of fraud or breaches any contracts made with consumers. In short, the bond is a type of insurance that protects the public if the transportation broker violates the terms of its license.
How Can an Insurance Agent Obtain a North Carolina Transportation Broker Surety Bond?
BondExchange makes obtaining a North Carolina Transportation Broker bond easy. Simply login to your account and use our keyword search to find the “Broker” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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Is a Credit Check Required for the North Carolina Transportation Broker Bond?
Surety companies will run a credit check on the broker to determine eligibility and pricing for the North Carolina Transportation Broker bond. Brokers with excellent credit and work experience can expect to receive the best rates. Brokers with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit,” meaning that the credit check will not affect the owner’s credit.
How Much Does the North Carolina Transportation Broker Bond Cost?
The North Carolina Transportation Broker bond can cost anywhere between $188 to $375 per year or $19 to $38 per month. Insurance companies determine the rate based on several factors including your customer’s credit score and experience. The chart below offers a quick reference for the cost of the $5,000 bond requirement.
$5,000 Transportation Broker Bond Cost
| Credit Score | Bond Cost (1 year) | Bond Cost (1 month) |
|---|---|---|
| 575+ | $188 | $19 |
| 550 – 574 | $250 | $25 |
| 500 – 549 | $375 | $38 |
*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.
Who is Required to Purchase the Bond?
North Carolina requires transportation brokers to purchase a surety bond as a prerequisite to obtaining a business license. To paraphrase North Carolina Statute 62-3, a transportation broker is a person that arranges for passengers to be transported by a motor carrier. Employees of motor carriers, and the carriers themselves, are exempt from this definition.
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How do North Carolina Transportation Brokers Apply for a License?
Transportation brokers in North Carolina must navigate several steps to obtain a license. Below are the general guidelines, but applicants should refer to the application form for details on the process.
Step 1 – Purchase a Surety Bond
Transportation brokers must purchase and maintain a $5,000 surety bond
Step 2 – Complete the Application
Transportation brokers should mail their completed applications, including a $25 fee, to the following address:
North Carolina Utilities Commission
4325 Mail Service Center
Raleigh, North Carolina 27699-4325
Brokers must submit 5 additional copies along with their original application.
Step 3 – Attend a Public Hearing and Submit Additional Documents
After receiving the broker’s application, the Utilities Commission will schedule a public hearing where the public, including other licensed brokers, will have the opportunity to object to the broker’s bid for licensure. Brokers must produce witnesses supporting their application if any objections are filed. If no objections are filed, the hearing will be canceled.
Before receiving their licenses, brokers must submit notarized letters or affidavits from persons seeking to do business with them. Additionally, brokers must file an affidavit or notarized letter certifying their ability to perform their duties and stating that they will only partner with authorized motor carriers.
Step 4 – Purchase a Surety Bond
Transportation brokers must purchase and maintain a $5,000 surety bond
What are the Insurance Requirements for North Carolina Transportation Brokers?
North Carolina does not require transportation brokers to purchase any form of liability insurance as a prerequisite to obtaining a business license. Brokers must purchase and maintain a $5,000 surety bond.
How Do North Carolina Transportation Brokers File Their Bonds?
Transportation brokers should mail their completed bond forms, including the power of attorney, to the following address:
North Carolina Utilities Commission
4325 Mail Service Center
Raleigh, North Carolina 27699-4325
The surety bond requires signatures from both the surety company that issues the bond and from the broker. The surety company should include the following information on the bond form:
- Legal name of the entity/individual(s) buying the bond
- Surety company’s name, address, and state of incorporation
- Date the bond goes into effect
- Date the bond is signed
What Can North Carolina Transportation Brokers do to Avoid Claims Made Against Their Bonds?
To avoid claims against their bonds, transportation brokers in North Carolina must follow all license regulations in the state, including some of the most important issues below that tend to cause claims:
- Do not engage in any acts of fraud
- Do not breach any contracts made with consumers
What Other Insurance Products Can Agents Offer North Carolina Transportation Brokers?
Most transportation brokers will purchase liability insurance. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for North Carolina Transportation Broker Customers?
North Carolina conveniently provides a public database of active transportation brokers in the state. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.