Utility Bonds: what are they?
A utility bond is sometimes required by utility companies if a business is expected to consume large amounts of energy, such as electricity or water.
If that is the case, then they may not turn on utilities for your business until the surety bond has been purchased.
If you are unsure if you need to have a utility bond, speak with one of our licensed agents today for more information.
If you have been notified by the utility company that they will require a bond, then we can help you get started on the process of obtaining your utility bond.
How do Utility Bonds work?
Utility Bonds work in the same way as other surety bonds. There are three entities for a Utility Surety Bond: the principal, the obligee, and the surety. The principal is the business or person required to purchase the bond. The obligee is the agency that requires the bond to be purchased, in this case, the utility company. The surety is the underwriter that provides the guarantee for the bond.
If your business fails to pay its utility bills in full and on time, then the utility company may file a claim against the bond. The surety company will investigate the claim, and if it is valid, then a payment is made. The business is then responsible for reimbursing the surety company for the payment made.
What is the cost of Utility Bonds?
Each state has set its own regulations for surety bonds. We take several factors into account when determining the cost of your utility bond. Contact us today and get a fast, free quote for a utility bond in your state. Our agents will be able to guide you through each step of the process and make sure that you get all of your bond paperwork quickly so that you can get your utilities up and running.