A Utility Deposit Bond is a surety bond required by some public utilities. Utility Deposit Bonds are typically used in place of an actual deposit. A Utility Bond is not always required. The utility has its own guidelines for determining when a bond may be required. Often, when a Utility Deposit Bond is required, it is required of a business that does not have an established payment history with the utility.
The Utility Deposit Bond, when put in place, protects the Utility. The bond essentially guarantees payment of the amounts due, up to the bond amount, for the utilities used at the location or locations. If the business fails to pay the utility, the utility can place a claim on the Utility Bond. The Surety, the entity that provides the guarantee behind the bond, will now have to pay the utility up to the amount of the bond.
A paid claim does not get the business off the hook for the unpaid amount; it just passes the debt collecting responsibility to the Surety. The Surety pays the utility and then attempts to collect from the business the amount paid on the claim. The business is still ultimately financially responsible for any amount paid out on a claim by the Surety.
Rates for Utility Deposit Bonds vary widely. The rates are determined based on various factors which include credit standing and may include financial standing as well. Typically, the poorer the credit, the higher the quotes are for Utility Bonds.
The best way to get a truly accurate quote for a Utility Bond is to apply for the bond and let the underwriter review the request and put a quote together.
Viking Bond Service, Inc. will always attempt to get the best rate for the request. In instances where the rate is high to start due to challenged credit, our renewal department can remarket the bond if there has been an improvement in credit and/or financial standing.
Viking can get you from bond application to bond in hand quick and easy. We work with both good and bad credit clients. Get started here.
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