Utility Deposit Bonds

Why is a Utility Surety Bond Required?

Utility surety bonds are often required in three common circumstances:

1. When a Utility Is Consumed In Large Quantities

The primary reason is when a business is going to be consuming a large amount of a utility (electric, gas, or water), the utility company wants to make sure the future bills will be paid.

We'll look at some examples below.

2. When a Business Has Neglected To Pay For Utility Usage or Personal Credit Is Limited

When a business has failed to pay for a utility in the past or the owners have a poor or limited personal credit history, the utility company will require a utility bond to make sure the monthly bills are paid.

3. Personal Credit is Poor For Personal or Rental Residences

If the credit check requirement to have a utility hooked up for a personal residence or other property indicates past issues, it's possible the utility company can require a utility bond.

This scenario is not as frequent, but we do help individuals obtain a utility bond every month.

Examples of Utility Deposit Bond Scenarios

Utility surety (deposit) bonds are often called electric bonds because they are mostly used by electricity utility providers.

Data Centers or Crypto Companies

We have provided utility bonds for both computer data centers and crypto companies.

As you can imagine the amount of electricity these businesses and buildings will use is enormous as will their utility bills.

The electricity provider wants a financial guarantee that the bill will be paid.

So the utility company will require a utility bond. In the event the business goes out of business or they neglect to pay a bill, the utility company can make a claim against the bond for financial compensation.

Restaurants and Strip Mall Owners

Another example is a strip mall owner who has a multitude of business tenets.

On an individual tenet level, a utility gas company may require a restaurant to purchase a utility gas bond to guarantee they can pay the bill for the first few years. This can also apply to electricity or water depending on the individual business.

But the electric and gas companies may require the strip mall owner to purchase bonds in the event their tenants don't pay and they have to be evicted. The utility companies still want to get paid and that is where the stripe mall owners bond protects the utility companies.

There are other examples, but the purpose of the bond is always the same.

The utility company wants to ensure they get paid for the services they are providing, because in most cases it's going to be a large amount of the utility all at one time.

What is the Utility Surety Bond Amount?

A utility bond's amount will be determined by the utility. It's typically the projected bill for the first year.

Just to recap, the bond amount is the total available coverage available to the utility company in the event a bill is not paid or can't be paid.

The most common bond amounts we tend to see are $10,000 to $50,000. Though larger businesses can go far above this range.

What is the Utility Surety Bond Price?

Once you have your bond amount, you can get exact pricing to purchase your surety bond.

The bond price will depend on a rate quoted from a surety company. A surety is an insurance company that underwrites utility surety bonds.

The primary factors a surety uses to determine their rate are:

• Personal credit of the employing owner or owners
• The history of paying utility companies from prior businesses if applicable
• Bonding history if an owner has been bonded in the past

What makes surety bonds unique is how wildly the prices can be from one surety to the next.

And this difference in pricing means you can save hundreds or many thousands of dollars depending on how large your bond amount is.

How To Get The Lowest Price For Your Utility Surety Bond

We are Surety Bonds Direct, a specialized surety agency. It's our job to make it easy to purchase a surety bond and we have a lot of experience with utility surety bonds.

The process only takes 3 steps.

The 3 Steps To Get Your Utility Bond Price

Step 1: Request your price quote

Click here or on the card above to request your bond price quote.

Remember, you will need to know your bond amount, since that is a primary factor determining your price.

When you request your quote, you will be assigned a bond specialist for your account.

Let's look at a pricing example so you can see how much the price can change based on different rates.

We'll assume a bond amount of $40,000, near the middle of the range we see most often.

Pay attention to the price difference the rates produce, remembering that rates often differ by 1% to 3%.

As you can see, if you save two percentage points, you can save well over $400.

Click here and complete our online quote form and get your exact pricing within one business day.

You are under no obligation to purchase once you get pricing. But you'll at least have a number for your situation so you can make the best decision for yourself.

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

Step 2 - Sit back and let us price shop for you

Your bond specialist will work with our network of A-rated sureties to find you the lowest rate and the price.

This process typically takes a few hours to complete and less than one business day.

Step 3 - Purchase Your Bond And Have It Issued

When you're ready, you can purchase your bond by completing an online order form.

And once your payment is complete, we will issue and manage your bond for you.

How Long Does It Take To Have Your Bond Issued?

After your purchase, our bond issuance team will get to work to prepare your bond with the:

• Correct bond form
• Necessary signatures
• Seals
• Power of Attorney

Depending on which utility is requiring the bond, there may be a specific bond form we have to use. Other times, we can use a generic form.

In nearly every case, because of our experience, we can let you know how to get the form you need. In most cases we'll have access to it already.

For most utility bonds, we can email you a copy of your bond so you can submit it to the utility with the required paperwork. If the utility needs a physical copy of the bond, we can mail that to you.

How Long Does a Utility Bond Last?

Because of the highly personalized nature of utility bonds, how long you must keep an active bond on file with the utility will be unique to you.

At a high level, a utility surety bond has a minimum term of 12 months. At the end of each 12 month term, the bond will need to be renewed for the following 12 months if necessary.

We've seen some cases where the business or individual needed to only keep their bond for 12 months.

We've also seen other scenarios where the business or individual needed to keep an active bond on file for many years.

The Renewal Process Is Fast And Easy

If you need to renew your bond, the process is fast and easy.

Before your bond expires (or needs to be renewed) your bond specialist will contact you 30 days prior to see what your needs are.

If you need to renew, your specialist will help you get your bond renewed in one business day.

If you don't need to renew, your specialist will help you cancel your bond.

When you're ready to get pricing and get this process started, Click here and complete our online quote form and you'll have exact pricing within one business day.

You are under no obligation to purchase once you get pricing. But you'll at least have a number for your situation so you can make the best decision for yourself.

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