Generating energy and providing utilities to businesses and homes is an expensive operation that cannot continue without prompt payment from customers. One way to ensure that utility companies receive the funds they need in order to continue operating is to require certain customers, mostly businesses, to obtain a utility bond, which is a type of commercial surety bond.
A utility bond acts as a contract between three entities; it protects the utility company by ensuring that customers’ payments are not delayed, for which the surety company is responsible if the bond conditions are breached. If losses are incurred, the surety company reimburses the utility company, which the customer must pay back to the surety company.
Not all utility customers have to get a utility bond, but some businesses and possibly individuals (particularly those with a history of late payments) may be required to obtain one as a prerequisite to having the utilities turned on or restored. Wondering if you’re required to post a utility bond? The quickest way to find out is to contact your utility company, or the one you wish to become a customer of.
Unlike various deposits, you don’t have to pay the full surety bond amount upfront. Instead, you pay a premium that represents a percentage of the total cost of the bond. That percentage is determined based on factors such as your credit score and payment history. Your independent insurance agent can provide you with a more accurate quote, as well as additional information.
We’ll help you get the coverage you need. Call Buschbach Insurance Agency at (708) 423-2350 for more information on Oak Lawn surety bonds.