Current motor carrier adding brokers authority

I would make them separate entities with like names like Fortycalglock suggested. This is just my way of thinking.

I see no benefit for having them combined. The like name will take care of the recognition factor. And finally the separation would allow for more flexibility for the future.

 

I did them separately with 2 totally different names. Don't put your eggs in one basket.

 

THANK you all for replying, these are the exact same issues i was concerned with.

 

I have talked to a lot of carriers with brokerage in my research. It all depends on the type of business you are running (not taking any cost factors into account). If this is a business that is a carrier first and you want to broker excess loads, then seperate companies require seperate contracts. And you will not be able to just broker a load that you can't cover with company trucks. Many will require the resending of a load contract.

The carriers that I talked to are split about 50/50 on the structure. But the ones that are seperate are a bit larger and have dedicated people just selling brokerage business.

But if you are selling it as brokerage then this is less of an issue.

"eggs in one basket" - I believe in diversification when it comes to investments. Just not sure that getting seperate authorities for two related businesses that you own 100% counts.

Insurance - If you are not goint to get contingent liability insurance then you will want to seperated them and make them look seperate. You do not want to have a claim on your carrier policy for broker business. But someone will try and it could get you dropped. My carrier insurance requires it if under same authority.

On cost, if you are running any kind of LLC or Corporation, remember to look at what your state charges for this.

 

No matter how you look at it, you will need two authorities. Actually your motor carrier authority and a "broker license" (proper terminology). Now wether you apply for those both under one business structure or not is up to you. Keep in mind for liability reasons seperating the two is ideal, but for marketing ease do not have drastically different names. Be careful how you conduct your brokerage operations as to not act like a MC. Doing so could bring liability to you when none is due.

 

Well said Grumman - I believe that if you are just adding brokerage then it is designated with a B after your MC. Just today my lawyer said that seperating them or not will have no impact on practical liability if I am running them together. He said when being sued they will search all angles and if they see a carrier at the same address as the broker they will dig to see how they are connected. And if it is the same ownership they will sue both entities.

I asked him the question because this thread go me thinking about making sure I protected the carrier from anything happening from brokered load.

Insurance guy agreed and added that you are best to have the same insurance carrier for both entities as it will only be dealing with one attorney and all the hasles that come with this BS.

 

OK, I was wrong. Trying to get everything completed on my insurance for the brokerage business and my company will not cover me if under the same authority. To the point of saying I will be a "non-renew".

But the good thing is I was pushing this issue because I thought that the GL policy was going to be several thousands of dollars and will be less than $1000. Honestly would not have GL at this stage as I am running it out of my house but what will be my best client wants it.

So, Seperate businesses it is.