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Utility Deposit Bonds (Utility Bond)

What is a Utility Deposit Bond?

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.

What does a Utility Deposit Bond do?

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.

How much does a Utility Deposit Bond cost?

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.

What is needed to apply for a Utility Deposit Bond:

  • Specific Bond form – A bond form is the actual document that contains the wording of the bond. In many cases a utility will require use of their specifically worded bond forms. Often times, we will already have a copy of these bond forms on file.
  • Bond Amount – The utility will specify the bond amount. This information needs to be passed to the Surety to get a quote.
  • Obligee name - This is usually the name of the utility requiring the bond of you.
  • Paid Current Verification – Occasionally, a Surety may want verification that the utility is currently paid up to date. If this is required, your Viking agent will let you know.

How to Get Started with your Utility Deposit Bond request:

  1. Contact us to go over your bond request. Our agents will be able to tell you exactly what may be required to get a good quote for your specific bond request.
  2. Complete an application and send any required documentation. Online Application
  3. Once the application is received, an agent will work to get the best quote for the request. Typically the quote will be obtained same day to 24 hours.
  4. Once the quotes are received, the most favorable quote will be relayed. All Viking Bond Service, Inc. quotes are FREE with No Obligation.
  5. The last step is to simply pay the premium and receive your Utility Deposit Bond.

Request a Utility Deposit Bond Quote:

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