During your search for an auto transporter you’ve probably heard the term “licensed, bonded and insured” .
In order for a broker to receive authority to operate as a broker the FMCSA requires them to have a surety bond. This is something the carriers look for before they accept any work with a broker as it’s their guarantee they will be paid for the job they’ve completed.
In order for a carrier to receive authority to operate as a carrier the FMCSA requires them to have insurance. A reputable broker will confirm the carrier has an insurance policy in effect.
So what is the difference between bonded and insured?
While both terms refer to some kind of financial coverage, insurance is related to the customer’s vehicle while a bond refers to ensuring payment for the item(s) that were transported.