[fusion_builder_container hundred_percent=”no” equal_height_columns=”no” menu_anchor=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” background_color=”” background_image=”” background_position=”center center” background_repeat=”no-repeat” fade=”no” background_parallax=”none” parallax_speed=”0.3″ video_mp4=”” video_webm=”” video_ogv=”” video_url=”” video_aspect_ratio=”16:9″ video_loop=”yes” video_mute=”yes” overlay_color=”” video_preview_image=”” border_size=”” border_color=”” border_style=”solid” padding_top=”” padding_bottom=”” padding_left=”” padding_right=””][fusion_builder_row][fusion_builder_column type=”1_1″ layout=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” border_position=”all” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” center_content=”no” last=”no” min_height=”” hover_type=”none” link=””][fusion_text]

Arkansas Utility Deposit Bond: A Comprehensive Guide

[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container][fusion_builder_container hundred_percent=”no” equal_height_columns=”no” menu_anchor=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” background_color=”” background_image=”” background_position=”center center” background_repeat=”no-repeat” fade=”no” background_parallax=”none” parallax_speed=”0.3″ video_mp4=”” video_webm=”” video_ogv=”” video_url=”” video_aspect_ratio=”16:9″ video_loop=”yes” video_mute=”yes” overlay_color=”” video_preview_image=”” border_size=”” border_color=”” border_style=”solid” padding_top=”” padding_bottom=”” padding_left=”” padding_right=””][/fusion_builder_container][fusion_builder_container hundred_percent=”no” equal_height_columns=”no” menu_anchor=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” background_color=”” background_image=”” background_position=”center center” background_repeat=”no-repeat” fade=”no” background_parallax=”none” parallax_speed=”0.3″ video_mp4=”” video_webm=”” video_ogv=”” video_url=”” video_aspect_ratio=”16:9″ video_loop=”yes” video_mute=”yes” overlay_color=”” video_preview_image=”” border_size=”” border_color=”” border_style=”solid” padding_top=”” padding_bottom=”” padding_left=”” padding_right=””][fusion_builder_row][fusion_builder_column type=”1_1″ layout=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” border_position=”all” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” center_content=”no” last=”no” min_height=”” hover_type=”none” link=””][fusion_text][fusion_text]This guide provides information for insurance agents to help their customers obtain an Arkansas Utility Deposit bond.

At a Glance:

• Average Cost: Between 2% to 7.5% of the bond amount per year based on the applicant’s credit
• Bond Amount: Determined on a case-by-case basis
• Who Needs it: Certain businesses seeking to activate utility services in Arkansas
• Purpose: To ensure utility companies receive compensation for financial harm if the consumer fails to pay their utility bills
• Who Requires Utility Deposit Bonds in Arkansas: Utility companies in Arkansas that provide services to the general public

Background

Utility companies in Arkansas often require customers expected to generate large monthly bills to pay a security deposit before initiating service. The security deposit protects utility companies from losses if the consumer fails to pay their monthly bills on time and in full. However, most utility companies in Arkansas allow customers to purchase and maintain a surety bond in lieu of depositing cash. Unlike most surety bonds, utility deposit bonds are not required by a government agency but by the utility company providing the service (unless a municipality owns the utility company).

What is the Purpose of the Arkansas Utility Deposit Bond?

Utility companies in Arkansas require consumers that do not wish to pay a security deposit to purchase a surety bond as a prerequisite to obtaining utility services. The bond ensures that the utility company will receive compensation for financial harm if the consumer fails to comply with the provisions laid out in the bond form. Specifically, the bond protects the utility company if the consumer does not pay their monthly bills. In short, the bond is a type of insurance that protects utility companies if the consumer fails to remit all required payments.

How Can an Insurance Agent Obtain an Arkansas Utility Deposit Surety Bond?

BondExchange makes obtaining an Arkansas Utility Deposit bond easy. Simply login to your account and use our keyword search to find the “utility” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

Not an agent? Then let us pair you with one!

Click the above image to find a BX Agent near you

Is a Credit Check Required for the Arkansas Utility Deposit Bond?

Surety companies will run a credit check on the applicant to determine eligibility and pricing for the Arkansas Utility Deposit bond. Applicants with excellent credit and work experience can expect to receive the best rates. Applicants with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the applicant’s credit.

How Much Does the Arkansas Utility Deposit Bond Cost?

The Arkansas Utility Deposit Bond can cost anywhere between 2% to 7.5% of the bond amount per year. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on a $10,000 bond requirement.

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$50,000 Alabama Utility Deposit Bond Cost

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*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.

BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.

Which Companies Allow Utility Deposit Bonds in Arkansas?

The following Arkansas utility companies allow customers to purchase a surety bond in lieu of paying a security deposit:

AEP Southwestern Electric Power

The company requires businesses to either deposit cash or purchase a surety bond before initiating service. If the business is requesting service in a location previously operated by a business of a similar type and size, then the bond amount must be equal to the average monthly bill for that location during the previous 12-month period. If the location is a new construction, then the company will determine the required amount based on the monthly usage of similar businesses.

Agents can contact AEP Southwestern Electric Power here.

 

Benton Utilities

Commercial business must either deposit cash or purchase a surety bond in an amount determined by the company. When determining the required amount, Benton Utilities will consider the estimated monthly bill to be owed by the business.

Agents can contact Benton Utilities here.

 

CenterPoint Energy

Requires high-use customers to deposit cash or purchase a surety bond. The bond amount is determined by the company on a case-by-case basis based on the customer’s estimated monthly bills.

Agents can contact CenterPoint Energy here.

 

Central Arkansas Water

All customers must either deposit cash or purchase a surety bond in an amount equal to twice their average monthly bill (as determined by the company).

Agents can contact Central Arkansas Water here.

 

Entergy Arkansas

Commercial businesses are required to either deposit cash or purchase a surety bond. The bond amount is determined by the company and will typically not be more than twice the customer’s estimated monthly bill, except in cases where the customer commits fraud, tampering, files for bankruptcy, or has a history of unpaid balances.

Agents can contact Entergy Arkansas here.

 

First Electric Cooperative

Commercial customers must either deposit cash or purchase a surety bond in an amount determined by the company. First Electric Cooperative will consider the customer’s estimated monthly bill when determining the required bond amount.

Agents can contact First Electric Cooperative here.

 

North Arkansas Electric Cooperative, Inc.

Customers must either deposit cash or purchase a surety bond in an amount equal to twice their estimated monthly bill, as determined by the company.

Agents can contact North Arkansas Electric Cooperative, Inc. here.

 

North Little Rock Utilities

Commercial businesses are required to make a cash deposit before in an amount equal to twice their estimated maximum monthly bill (as determined by the company) before having their service initiated. If the required amount is over $300, the business may purchase a surety bond instead.

Agents can contact North Little Rock Utilities here.

 

Osceola Municipal Light and Power

High-use customers may be required to either deposit cash or purchase a surety bond in an amount determined by the city of Osceola.

Agents can contact Osceola Municipal Light and Power here.

 

Paragould Light, Water, and Cable

Commercial businesses may be required to deposit cash or purchase a surety bond before activating their service. When determining the required bond amount, the company will consider the customer’s estimated monthly bills.

Agents can contact Paragould Light, Water, and Cable here.

 

West Memphis Utilities

Commercial businesses must either deposit cash or purchase a surety bond in an amount determined by the city. When determining the required amount, the city will consider the customer’s estimated monthly bills.

Agents can contact West Memphis Utilities here.

How Do Arkansas Utility Customers File Their Bonds?

Utility customers in Arkansas should submit their completed bond forms, including the power of attorney, to the company requiring the bond. The surety bond requires signatures from both the surety company that issues the bond and from the customer. In some instances, the bond will require witness signatures as well. Generally, the surety company will include the following information on the bond form:

• Name and address of entity/individual(s) buying the bond
• Surety company’s name and address
• Entity requiring the bond
• Bond amount
• Date the bond is signed
• Date the bond goes into effect

What Can Utility Customers in Arkansas Do to Avoid Claims Against Their Bonds?

To avoid claims on their bonds, utility customers in Arkansas must ensure they pay their utility bills on time and in full.

What Other Insurance Products Can Agents Offer Utility Customers in Arkansas?

Utility companies generally only require businesses to be bonded. As such, agents can offer their customers general business and liability insurance in addition to the utility deposit bond. Bonds are our only business at BondExchange, so we do not issue liability insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

Should Your Customer Purchase a Surety Bond or Deposit Cash?

Surety bonds are generally considered the better option for businesses, as they free up working capital that would otherwise have to be deposited with the utility company. For more information on whether your customer should purchase a bond or deposit cash, contact BondExchange.

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