All about Utility Deposit Bonds
Utility deposit bond Florida is a type of commercial bond that is required from businesses or homeowners by utility companies to ensure that there is no delay in paying utility bills. The obligee here is the utility company and the principal is the homeowner or business. If there is a breach in the conditions of the bond, the principal and the surety will both be liable for paying the compensation.
Who needs utility deposit bonds?
Not everyone needs a utility deposit bond. Homeowners or individuals are rarely required to get the bond unless they have a history of delayed or non-payment. It is more of common case for businesses. A utility bond may be required as a prerequisite for turning on the utilities.
Why we need utility deposit bonds?
Why do some people need utility deposit bond Florida and some don’t? Why do businesses need it more often than the average homeowner? The reason lies in the risk attached to the supply of utilities. For instance, the supply of electricity comes at a cost and must be recovered in a timely manner by the utility company. The greater the risk, the more the necessity of the bond.
For homeowners: Homeowners are usually required to buy a utility deposit bond only if they have a history of delayed payments or non-payments. In such cases, the utility company wants to ensure that such behavior can be curbed, and they can cover any losses if the principal does default.
For businesses: Businesses are often required to buy the bond simply because the risk involved is far greater. Some businesses require large amounts of power for machinery or water manufacturing purposes. Even a single missed installment can mean a considerable loss for the utility company. The utility deposit bond Florida is meant to both discourage such behavior and ensure recovery of losses for the utility company.