Home / Louisiana Utility Bond

Louisiana Utility Bond

Before you get access to water, electricity, gas, or other local utilities, the utility provider may require you to get a specific type of surety bond called a Louisiana Utility Bond.

What is a Louisiana Utility Bond?

This and all other types of surety bonds exist to hold people financially accountable when they don't practice legal, ethical, or contractually-mandated behavior. In the case of a utility bond in Louisiana, the bond holds someone responsible when they fail to pay their utility bill on time or in full. The utility company may file a claim against the bond seeking compensation. Eventually, the bonded party must pay for that claim - making it even more detrimental to fail to pay utility bills.

How does a Louisiana Utility Bond work?

If someone can't or won't pay their utility bill, the utility company will file a claim against the utility bond. The surety company that backs the bond agrees to pay for all claims, thereby guaranteeing utility companies can recoup losses from unpaid utility bills. Since the surety company only backs the bond - it doesn't also accept financial liability for the claim - the bonded party must pay the surety back the full amount of the claim.

Who should get a Utility Bond in Louisiana?

A local utility company may require a bond when someone seeking services has a history of unpaid bills. Commercial clients may also be required to obtain the bond if they use large amounts of the utility on a monthly basis - e.g. a factory that expects to have huge electric bills. Plan to get a bond ASAP because the utility company will not extend service without proof of an active Louisiana Utility Bond.

Who are the parties involved in a Louisiana Utility Bond?

The utility company and utility customer aren't the only ones involved. All surety bonds involved three parties:

• Principal - The utility customer. As the bonded party, the principal must (eventually) pay to settle all claims.
• Obligee - The utility provider. The obligee sets the bond requirement and files claims against the bond when the principal doesn't pay their utility bills.
• Surety - The surety bond provider. The surety guarantees payment to the obligee, but the principal must pay that debt back with interest and fees added.

How much does a Louisiana Utility Bond cost?

The surety bond provider creates a custom quote for everyone who applies for a utility bond in Louisiana. The quote is based on the size of the bond, which the utility company determines when creating the bond requirements. It also depends on the credit score and financial history of the bond seeker. In all cases, the cost (officially known as the bond premium) is a small percentage of the bond total. Get a competitive rate even with bad credit by applying for a surety bond through Viking Bond Service.

How are claims handled for Utility Surety Bond in Louisiana?

All claims receive a thorough investigation to determine whether the principal actually owes as much to the obligee as the claim alleges. Provided that everything checks out, the surety pays to settle the claim, then turns its focus to collecting the same amount (plus interest and fees) from the principal.

How to apply for a Utility Bond in Louisiana?

The application process involves just a few steps. First, fill out a standard bond application, which will ask about your finances, business interests, and background. Second, submit to a credit check. Finally, provide a copy of the bond requirements created by the utility company (the obligee), along with any other documents the surety asks for. You should receive a quote for the bond premium shortly.

Viking Bond Service - Meet the Louisiana Utility Bond Requirements

Viking Bond Service is here to help you get a bond fast at a rate you can afford. Fill out our online bond application at any time to get the process started. Or connect with one of our bond experts - call 1-888-278-7389 or use the contact form on this page.