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Connecticut 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 a Connecticut 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 Connecticut
- 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 Connecticut: Utility companies in Connecticut that provide services to the general public
Background
Utility companies in Connecticut 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 Connecticut allow customers to purchase and maintain a surety bond in lieu of a security deposit. 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 Connecticut Utility Deposit Bond?
Utility companies in Connecticut 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 a Connecticut Utility Deposit Surety Bond?
BondExchange makes obtaining a Connecticut 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!
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Is a Credit Check Required for the Connecticut Utility Deposit Bond?
Surety companies will run a credit check on the applicant to determine eligibility and pricing for the Connecticut 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 Connecticut Utility Deposit Bond Cost?
The Connecticut 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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$10,000 Utility Deposit Bond Cost
| Credit Score* | Bond Cost (1 year) | Bond Cost (1 month) |
|---|---|---|
| 800+ | $200 | $20 |
| 650 – 799 | $500 | $50 |
| 600 – 649 | $750 | $75 |
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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 Connecticut?
The following Connecticut utility companies allow customers to purchase a surety bond in lieu of depositing cash:
Eversource Energy
All commercial customers must either deposit cash or purchase a surety bond in an amount determined by the company. Residential customers may also be required to deposit cash or purchase a bond if they have any past-due balances.
Agents can contact Eversource Energy here.
Norwich Public Utilities
Commercial and industrial accounts are required to deposit cash or purchase a surety bond in an amount equal to three times the customer’s estimated monthly bill. When determining the required bond amount, Norwich Public Utilities will examine the location’s previous usage or that of a similar property.
Agents can contact Norwich Public Utilities here.
Wallingford Electric
Commercial and industrial customers must either deposit cash or purchase a surety bond in an amount determined by Wallingford Electric. When determining the required bond amount, Wallingford Electric will consider factors such as the type of business being conducted, the facility’s total square footage, the % of the area with utility service, and the ratings of the main electrical service gear. The required bond amount for customers at an existing location where the nature of the utility service being provided is not changing may equal the three highest consecutive monthly bills during the previous 12-month period.
Agents can contact Wallingford Electric here.
Yankee Gas Services Company
Commercial customers may be required to deposit cash or purchase a surety bond in an amount determined by the company. The required bond amount may not exceed the customer’s estimated maximum bill for a 90-day period (as determined by the company).
Yankee Gas Services Company is owned by Eversource. Agents can contact Eversource here.
How Do Connecticut Utility Customers File Their Bonds?
Utility customers in Connecticut 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 Connecticut Do to Avoid Claims Against Their Bonds?
To avoid claims on their bonds, utility customers in Connecticut must ensure they pay their utility bills on time and in full.
What Other Insurance Products Can Agents Offer Utility Customers in Connecticut?
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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