Other Commercial
Utility Deposit Bond
A utility deposit bond is a surety bond a business posts with an electric, gas, or water utility in place of a cash security deposit.
- Required by
- Electric, gas, and water utilities, in place of a cash deposit
- Bond amount
- Set by whoever requires the bond. We confirm it.
What this bond guarantees
The bond promises the utility that the customer will pay its utility bills. The utility is the obligee. If the customer does not pay, the utility claims on the bond, and the customer must repay the surety.
Who needs it
- Businesses opening new commercial utility accounts
- High-volume utility users
- Customers with limited or poor payment history with the utility
What the underwriter looks at
- Expected monthly utility bill
- Credit of the business and owners
- Payment history with the utility
Requirements vary by state and by who asks for the bond. Send us the request you received and we will confirm exactly what it calls for.
Common questions
Why use a bond instead of a cash deposit?
A bond keeps your cash free for the business. You pay a premium instead of tying up the full deposit. Ask your utility first whether it accepts surety bonds and in what amount.
How much bond will the utility ask for?
Utilities usually base it on your estimated monthly bill, often a multiple of one or two months. The utility sets the number, so get it in writing before applying.