New York Energy Broker and Energy Consultant Surety Bonds

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Who is Required To Purchase an Energy Broker Surety Bond?

Energy Brokers

Energy brokers are businesses who help large commercial property owners negotiate better terms for their electrical and natural gas energy needs. This includes helping customers:

• Understand their energy costs and contracts
• Stay up to date with energy prices changes and regulatory changes
• Avoid common pitfalls when securing large contracts for energy needs
• Matching the property owner to the right third party energy provider

Energy brokers have a bond amount of $100,000.

Energy Consultants

Consultants act more in an advisor role helping large property owners understand their energy needs with available suppliers.

Consultants can act in negotiating roles with energy suppliers on behalf of their clients. And in some cases can accept contractors on behalf of energy service companies.

Energy consultants have a bond amount of $50,000.

The Standby Letter of Credit

The Department will accept a stand by letter of credit. However, in most cases when it comes to a surety bond vs a letter of credit the surety bond will be significantly less expensive.

The primary reason is the financial institution extending the letter of credit will likely always require the business to fund the majority of the account.

This means the business will have to initially outlay a large capital amount, which is not ideal as you work to get your business up and running.

Why is a New York Energy Broker Bond Required?

The energy broker surety bond and energy consultant surety bond is required to hold brokers and consultants accountable to the laws for operating a broker or consultant business.

In other words, the surety bond's purpose is to prevent fraud from businesses registered by the Department of Public Service.

By issuing registrations to businesses the Department of Public Service is signaling to the public that these businesses have met all legal requirements and can be trusted to provide the required services.

The Department can't police all the businesses they issue licenses to so they use the surety bond to hold every business accountable.

It's unfortunate but every year there will be a small number of businesses that purposefully commit fraud to make more money.

Examples of fraudulent actions can include:

• Charging excessive fees
• Broker or recommending service providers that might provide kick backs to the broker or consultant
• Lying about regulation changes or pricing to secure high project totals

If a large property owner is financially harmed by an energy broker or energy consultant, they can make a claim against the surety bond for the financial damages. However, the maximum amount of any one or multiple claims is capped at the bond amount.

Bottom line the surety bond is required to hold New York energy brokers and energy consultants accountable to the laws that regulate their license registration.

How Much Does a New York Energy Broker Surety Bond Cost?

The price of both the energy broker and energy consultant surety bond is custom based on the business.

Surety bonds are underwritten by a surety or a commercial insurance company that underwrites energy broker surety bonds.

These surety companies will primarily look at the following 3 factors when assessing an applicant:

• Personal credit of the business owner or owners
• Any brokerage or consultation experience in the energy industry
• Prior bond claims if any owner has been licensed in the past

From these factors each surety will provide a rate. This rate multiplied by your bond amount will be the price you pay.

How To Save Hundreds Even Thousands Of Dollars Buying an Energy Broker Bond

Each surety company that underwrites New York energy broker bonds uses their own criteria for determining a rate. And these rates can vary by 1%, 2%, even 3% or more.

So whether you need the $50,000 energy consultant bond or the $100,000 energy broker bond, you can expect to save a considerable amount of money getting the lowest rate.

We are Surety Bonds Direct and that's exactly what we do for our customers. We price shop, find our customers the lowest rate, and make purchasing a surety bond easy.

Let's look at an example using the $100,000 energy broker bond requirement..

The rates used in the table are from really good to average.

You can get your pricing today and know exactly what you will have to pay to meet this license requirement.

And if you're not ready to purchase, all quotes are guaranteed for 30 days so there is no rush or pressure if you're not ready to purchase.

Go request your price quote today. Remember, this is free information for you. There's no obligation to purchase. Quotes are good for 30 days.

If you prefer to speak with a bond specialist, you can call 1-800-608-9950.

What Do You Do After You Purchase Your New York Energy Broker Surety Bond?

When you're ready to purchase your bond and have it issued, all you have to do is complete an online order form.

Once your payment is complete, our issuance team will get to work to prepare your bond using the:

• Correct bond form
• Required signatures and seals
• Power of attorney

Once you receive your bond, you can sign it and submit it to the New York Department of Public Service.

How Long Does a New York Energy Broker Surety Bond Last?

Surety bonds do expire. You will be required to renew your bond 12 months after the bond's activation date.

The activation date is a date you choose when you purchase your bond. Most businesses make this date their purchase date or a few days before or after.

As the end of 12 month bond terms nears, you must renew the bond for the following 12 month period.

As a Surety Bonds Direct customer, you're assigned your own bond specialist to manage your bond for you.

As your renewal date approaches, your bond specialist will contact you to remind you of the expiration date and have renewing pricing ready to go.

This bond is considered continuous. All this means is the original bond you file with the Department of Public Service will remain on file as long as you pay the renewal premium each year.

You will not have to submit a new bond every year you renew.