A utility bond is a kind of insurance that residential and business owners purchase to ensure a full and timely payment to a utility company. While many other surety bonds protect the consumers from acts of fraud or non-compliance, the utility bond protects the utility company by ensuring it receives payment. The bond acts as a financial guarantee that a person will pay for utilities on time. Most of the utility companies require this kind of bond before they ever turn on the utilities.
Most government bodies require several businesses in various industries to acquire license and permit bonds. In the meanwhile, few surety bonds like utility bond are required by certain parties to carry out actions like turn on utilities. When it comes to purchasing utility bonds, it is often up to the utility companies such as water companies, gas companies and power companies to decide which consumers need to buy a bond. Utility customers that uses large amount of energy such as manufacturing companies, campgrounds, restaurants, etc., are generally required to buy utility bonds. In case, the utility customers fail to pay their bill in full and on time, the utility company can file a claim against the bond. If proved, the surety agency will pay the amount of the claim and the bonded party (principal) must reimburse the surety for the claim amount.
The cost of utility deposit bonds may vary from company to company. They are often based on a percentage of the estimated cost of their services to be used over a specific period of time. Those who are looking for utility bonds must know that a good credit is a vital requirement for surety companies to write utility deposit surety bonds. Therefore, before residential or business owners apply for a bond from an agency, they must submit themselves to a credit check, have their application approved and go through other screening processes. The process of applying for a surety bond online is quite easier, you just need to:
- Complete a utility deposit surety bond application
- Download and complete a printable utility deposit surety bond application
- Receive a surety bond quote in minutes.
If you are looking to buy utility bonds, online purchasing is one of the easiest and fastest ways. Here, you can also get the lowest possible rates based on your specific circumstances.