Utility Bond InformationA utility bond is required by utility companies, before they’ll provide you with their services. The bond is a guarantee that you will make all due payments to the company in time. Individuals need utility bonds only in some specific circumstances. However, businesses are often required to provide the bond before the utility starts the service. Homeowners might be asked to get a utility bond if they have a track record of late payments, in order to guarantee that they won’t default on their payments. The utility deposit bond is a contractual agreement between three parties. Your business is the principal, the utility company is the obligee that requires the bond, and the surety is the one providing it. The utility bond is a financial guarantee bond. In most cases, surety bonds protect the consumer and are required by state or government authorities. In this case, the protection is sought by the private utility companies. Financial guarantee bonds have been unpopular with sureties because of the higher financial risk involved. Recently, however, more sureties are underwriting this kind of bonds, and the market is opening. Don’t forget that getting a claim on your utility surety bond is not a good idea. If a claim is proven, the surety will cover all costs up to the penal sum. Afterwards, you will have to reimburse the surety in full. A claim against your bond can have a negative impact on your business, which is why you should always avoid claims.
Listed below are the 3 absolutes in surety.
- Most be a US Citizen
- Cannot be in current bankruptcy
- Cannot be behind in child support
Three party agreement
Surety Bond Definition: The definition of a surety bond is as follows: A surety bond is a binding agreement between three parties. This agreement sets forth a financial guarantee by one party ( “surety” ) to another party ( “obligee” ) that a third party ( “principal” ) will fulfill required obligations to the obligee, and that state, federal, and local laws and applicable regulations will be adhered to. Let’s examine each of the three parties.Learn more about surety bonds
Bad Credit – Fast Approvals – Lowest Rates Available.
- Credit below 650 and/or have blemishes on credit report.
- Average cost is 5-15% of the bond amount.
- Available for all commercial bonds.
Why does credit matter? Applying for a surety bond is similar to applying for a loan. You are asking a surety company to back you financially. Reviewing credit is the best method for the surety to understand their risk. All sureties review credit as a view only and should have no effect on your credit score. While it is true that bad credit makes it harder to obtain a competitive quote, we are committed to making sure all of our customers have access to the best possible rates. While we can’t guarantee that we can provide a bond for the most extreme bad credit situations, we strive to make sure no stone is unturned! In other words, if you are insurable, we will get it written. Contact us today and let us put together an online quote for you that will exceed your expectations.