A utility bond lets a business skip a large cash deposit with its electric, gas, or water company. It promises the utility you will pay your bills.
- Who needs it
- Businesses that use a lot of power, gas, or water
- Typical bond amount
- The deposit the utility asks for
- What you pay
- A small percent of the bond amount, based on credit
- Term
- One year, renewable
- A claim protects
- The utility company
What is an Utility Bond?
A utility bond, also called a utility deposit bond, takes the place of a cash deposit. Utilities often ask new or high-use business customers for a deposit. The bond stands in for that cash, so your money stays in your business.
If you do not pay your utility bills, the utility files a claim and the bond pays them up to the bond amount.
Who needs an Utility Bond?
Businesses that use a lot of power, gas, or water often need one. Factories, large stores, restaurants, and data centers are common examples.
The utility decides the deposit, and you can post this bond instead of tying up cash.
How does an Utility Bond work?
The steps are simple:
- The utility sets the deposit amount they want.
- You buy a utility bond from Junno Surety for that amount.
- You give the bond to the utility instead of cash.
- You pay your utility bills on time.
- If you do not pay, the utility files a claim against the bond.
Pay your bills on time and you keep your cash and a clean record.
How much does an Utility Bond cost?
You pay a small percent of the bond amount, based on your credit. Junno Surety prices at the industry rate minus 5%.
The bond often costs far less than locking up a big cash deposit, which is why many businesses choose it.
What happens if someone files a claim?
A claim happens when you fall behind on your utility bills. The utility files a claim, the bond pays the unpaid amount up to the bond amount, and then you repay the bond company.
How to get your Utility Bond from Junno Surety
Junno Surety can post your utility bond fast so you keep your cash working in your business. Send us the deposit amount the utility wants, and we will quote you the same day.
We are a licensed surety bond agency and can often issue your utility bond the same day. Start your free quote → or call (762) 499-0237.
Things to know about an Utility Bond
The whole point of a utility bond is to keep your cash in your business. Utilities often ask big customers for a large deposit before they turn on service. That money just sits there. A utility bond replaces that deposit for a small yearly fee, so your cash stays where it can grow your business. The utility still gets its protection. If you fall behind on your bills, the utility can claim on the bond. So treat your utility bill like any other must-pay expense. Pay on time, and the bond is simply a cheaper way to meet the deposit rule. Many businesses switch to a bond once they do the math.
Frequently asked questions
Why use a utility bond instead of a deposit?
It frees up your cash. Instead of leaving a big deposit with the utility, you post a low-cost bond and keep your money in your business.
Who sets the amount?
The utility company sets the deposit, and your bond matches that amount.
How much does it cost?
A small percent of the bond amount, based on your credit. It is usually much cheaper than the cash deposit it replaces.
How is a utility bond different from a deposit?
A deposit ties up your cash with the utility. A utility bond replaces that deposit for a small fee, so you keep your cash and still meet the rule.
Who decides the bond amount?
The utility company sets the deposit amount it wants, and your bond is written to match that amount.