Utility Bond

The majority of utility companies will ask you to post a utility bond before they start servicing your business. If your company wants to get connected to electricity, water and other services, you will have to obtain such a bond.

Usually utility providers do not require individual homeowners to get bonds, but if you have a track record of late or default payments, you might be asked to post one.

Similarly to other bonds, a utility bond does not protect you or your business. It is a guarantee for your utility company that you will make all due payments for the services they have provided for you.

Before providing service for your home or business, the utility company will determine the surety bond amount that you need to post as a security. The amounts vary between states and utility providers.

Your surety bond cost depends on the amount set by the utility provider, and on your financial status. To get bonded, you don’t need to pay the full sum, but only a percentage of known as the bond premium. Your bonding rate is typically determined on the basis of your personal credit profile. If you have strong credit, the usual premium rate for utility bonds is between 1% and 5%.

If you are asked to post a $20,000 utility bond, you might end up paying between $200 and $1,000 for it.

The top indicator that sureties consider when reviewing your bond application is your personal credit score. Other factors include your business assets and liquidity, financial security, and professional experience. The better these stats look, the lower the bonding rate will be, which means a cheaper surety bond cost.

You can use our surety bond cost guide to get an understanding of how bond premiums are set.

As utility bonds are financial guarantee bonds, they are considered higher risk ones. The reason for this is that in case the principal defaults, the surety will take direct financial losses.

Many sureties avoid underwriting such bonds because of the increased risk. Here at Lance Surety Bonds, we’re committed to providing you with the utility bonds you need, even if your credit score is far from stellar. That’s why we are running our Bad Credit Program and serving bond applicants with problematic finances or past tax liens, civil judgments or bankruptcies.

The usual bonding rates for bad credit utility bonds start at around 5%, but can go as high as 20% of the bond amount. The higher premium is needed in order to compensate for the riskier bonding. However, it is still a great opportunity to get the utility revenue bond your home or business needs, so you can get electricity, water, and other necessary services running in your buildings.

Lance Surety Bonds works with a number of trusted A-rated, T-listed surety companies, so we are able to get you the best bond price for your particular circumstances.

You can launch the process of getting your utility revenue bond today. Just apply online for your free, no-obligations quote. When you complete your application and send over all necessary documents, we’ll get back to you with your bond price in no time.

Usually utility companies require you to use their specific bond forms, so you’ll need to use the form of their preference. In case they don’t have a standard one, we can provide you with a utility bond form, but you will need to ensure that it is approved by your utility provider.

Call us today at (877) 514-5146 to discuss your bond application or get your questions answered by our bonding experts. You can also contact us via email if your prefer.

You can find plenty of useful information at our How to Get Bonded page as well.

In most cases, utility bonds are continuous. This signifies that you or your business must have the bond active at all times, in order to keep using the services of your utility provider. Failing to do so may lead to your utilities being shut off.

With Lance Surety Bonds, you don’t have to worry about missing your bond renewal deadline. We will notify you a few months in advance, so you will have plenty of time to react and renew your utility bond. The first notification will be followed by mail, fax, and email, in order to make sure you don’t forget to renew your bond.

Every time you renew your utility bond, you can decrease your surety bond cost by improving your financial stats, and showcasing the strength of your business.

Unlike insurance, surety bonds do not protect you or your business. Here’s why that’s important.

The goal of utility bonds is to guarantee that you will not financially harm your utility provider, by defaulting or delaying due payments. If you fail to cover all your bills in time, the utility company can make a claim on your bond.

Proven claims entail repayment to the utility provider up to the penal sum of the bond, which is initially done by the surety. As the bond principal, you are then expected to fully reimburse any claims.

Avoiding claims is the wisest course of action for both homeowners and businesses. They can cause serious financial harm, and prevent you from getting bonded in the future.