UTILITY DEPOSIT BONDS

UTILITY DEPOSIT BOND

American Surety Bonds Agency helps businesses and other qualifying customers apply for a Utility Deposit Bond when their utility company accepts a surety bond as an alternative to a cash deposit.

A Utility Deposit Bond guarantees that a customer will pay their utility bills as agreed. It’s posted with a utility company — electric, gas, water, or telephone — as an alternative to a cash security deposit. If the bonded customer fails to pay, the utility company can file a claim against the bond for the unpaid amount, up to the bond’s limit.

If the bonded customer does not pay a utility bill, the utility company may file a claim against the bond for the unpaid amount, up to the bond limit. The customer must reimburse the surety for any valid claim paid. When accepted by the utility company, the bond allows the customer to meet the deposit requirement without providing the full amount in cash.

Depending on the utility company, this bond may also be called:

• Utility Bond
• Utility Surety Bond
• Utility Guarantee Bond
• Utility Payment Bond

These names often describe the same general type of bond, but the utility company’s required bond form controls the exact obligation.

A utility company may require or allow a Utility Deposit Bond before opening, maintaining, or restoring an account. This most commonly applies to:

• New businesses that do not yet have an established payment history with the utility company
• Commercial or industrial customers with substantial or variable utility usage
• Businesses or individuals that would otherwise be required to provide a large cash security deposit
• Customers with late payments, a prior default, or interrupted utility service
• Existing customers whose utility company has increased or reassessed the deposit requirement

Most utility companies limit this option to commercial and industrial customers, though some allow residential accounts to use it as well. Each utility company sets its own policy on whether a bond is accepted and how the bond amount is calculated — check with your utility company directly if you’re not sure whether this applies to your account.

To apply, you’ll generally need:

• The utility company’s legal name, required bond amount, and bond form or written bond requirements
• The utility account number, if one has already been assigned
• The applicant’s legal name, address, contact information, and EIN — or other identifying information for an individual applicant
• Personal and/or business information needed for underwriting, including a credit history review and any additional financial or payment-history information the surety requests

The utility company is the obligee—the party protected by the bond. Because each obligee may use different wording, American Surety Bonds Agency needs the obligee’s bond form or written requirements during the application process to prepare the correct bond. Once your application and credit review are complete, our underwriting team will provide your rate.

Your required bond amount is set by your utility company, typically based on your expected or average monthly usage — there’s no single fixed amount that applies to every account. American Surety Bonds Agency underwrites your premium, what you actually pay, based primarily on your bond amount, credit history, and payment history.

Obtaining your Utility Deposit Bond through American Surety Bonds Agency is simple:

1. Complete the bond application.
2. Our underwriting team reviews your application, required bond amount, credit history, and payment background.
3. Once approved, review your rate and pay to finalize your bond.
4. Submit your bond to your utility company to start or restore service.

American Surety Bonds Agency has been helping businesses and individuals meet their utility deposit requirements for decades. Whether you’re opening a new business account or need to restore service after a payment issue, our experienced team is here to make the process simple and efficient.

When you choose American Surety Bonds Agency, you’ll receive:

• Experienced surety bond professionals
• Competitive rates from leading surety companies
• Fast underwriting and responsive customer service
• A secure online application process
• Help determining the right bond amount for your utility company’s requirement

Above all, we’re committed to helping you meet your utility deposit requirement quickly and correctly, with experienced guidance every step of the way.

Utility Deposit Bond Basics

Applying & Cost

Contact American Surety Bonds Agency toll-free at (877) 201-8976 or our Atlanta office at (404) 486-2355. Our team can help determine your bond amount and walk you through the application process.