Southwest Gas Corporation Utility Deposit Bond
The State of California requires businesses to file for bonds with the Southwest Gas Corporation. This bond is required for businesses to protect the Obligee – in this case the Southwest Gas Corporation – from possible losses should accredited businesses violate licensing provisions like the failure to meet utility bills accrued in their business operations.
What is a Utility Deposit?
A utility deposit, akin to security deposits, ensures that bills are covered should business owners default to the utility company. This deposit covers bills for gas servicing provided by, in this case, the Southwest Gas Corporation while preventing the Principal from accumulating expensive security deposits.
Utility companies will normally check for an applicant’s credit score before issuing their accounts. By default, they prefer applicants with credible credit history. Despite a poor credit history, businesses may still be able to setup their deposits but at higher utility deposit amounts.
What is the Southwest Gas Corporation Utility Deposit Bond?
The Southwest Gas Corporation Utility Deposit Bond guarantees the Obligee’s compensation should accredited businesses fail to meet their utility payments. This bond is in lieu of actual cash deposits needed for the activation of a business’ license. Essentially, a business transfers the deposit coverage to a surety bond carrier to ensure the Obligee is paid for their services.
How does it work?
The bond must be issued by a surety bond provider certified by the Department of Insurance of the Southwest Gas Corporation. The parties in the agreement are the Principal (business or permit applicant), Obligee (Southwest Gas Corporation), and Surety/Bond Company or Obligor (surety bond carrier or insurance company).
The Bond Company will guarantee the compensation (performance bond) of the Obligee should the Principal fail to meet their payments or violate other licensing provisions. The Surety Company will receive and assess the validity of claims where claims may only amount to the total penal sum agreed upon in the bond form. The Principal shall reimburse all expenses covered by the Surety Company.
The Bond Company is secured through an indemnity agreement as the licensed business is mandated by law for the full reimbursement of the claims, including legal fees and premiums. This agreement shall be made before the execution of the bond and shall ascertain the businesses responsibility over their dealings.
How much does it cost?
The total bond amount for the Southwest Gas Corporation Utility Deposit will depend on the business owner’s experience, credit score, and license history. Upon evaluation of the following factors, the bond will normally cost between 2.0% to 15% for qualifying applicants.
To know your rate, visit here and get your surety bond quote today!
How can I apply for this bond?
At Surety Bond Authority, we are dedicated to help you get your bond the fast and easy way. Here is a step-by-step guide to help you get started.
To get your utility deposit ready, you are going to have to secure your bond as early as possible. If you are ready to get yours processed today, you can APPLY HERE. Rest assured our expert surety bond agent will guide you from the time of your application until the issuance of your bond.
In the assessment phase, our underwriter will need the following information:
- Nature of your profession or business
- Credit score
- Financial strength
For the speedy processing of your application, ensure you have gathered and provided accurate information upon submission.
Once the assessment is done, we will promptly issue your bond and send it your way. Contact us today and get your bond issued in no time!