Wisconsin Utility Deposit Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a Wisconsin 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 (more on this later)
- Who Needs it: Commercial customers that do not want to pay a cash deposit
- Purpose: To ensure the utility company receives compensation for financial harm if the business fails to pay their utility bills
- Who Requires Utility Deposit Bonds in Wisconsin: We Energies
Wisconsin PSC 113.0403 authorizes utility companies to require customers that have not established an established credit with them to pay a security deposit before initiating service. Security deposits help ensure utility companies do not suffer financial harm if customers do not pay their bills. In lieu of depositing cash, We Energies allows commercial customers to purchase and maintain a surety bond.
What is the Purpose of the Wisconsin Utility Deposit Bond?
We Energies requires commercial customers not wishing to deposit cash to purchase a surety bond as a prerequisite to obtaining utility services. The bond ensures that the company will receive compensation for financial harm if the customer fails to comply with the provisions laid out in the bond form. Specifically, the bond protects the utility company if the customer does not pay their monthly bills. In short, the bond is a type of insurance that protects utility companies if the customer fails to remit all required payments.
How Can an Insurance Agent Obtain a Wisconsin Utility Deposit Surety Bond?
BondExchange makes obtaining a Wisconsin Utility Deposit Surety 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.
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How is the Bond Amount Determined?
We Energies dictates that the bond must be in an amount equal to the location’s actual or estimated two highest consecutive monthly bills during a 12-month period.
Is a Credit Check Required for the Wisconsin Utility Deposit Bond?
Surety companies will run a credit check on the applicant to determine eligibility and pricing for the Wisconsin 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 Wisconsin Utility Deposit Bond Cost?
The Wisconsin 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.
$10,000 Utility Deposit Bond Cost
|Credit Score*||Bond Cost (1 Year)||Bond Cost (1 month)|
|650 – 799||$500||$50|
|600 – 649||$750||$75|
*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.
Who May Purchase a Wisconsin Utility Deposit Bond?
Commercial customers that have not established a credit history with We Energies may purchase a surety bond instead of paying a cash deposit.
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.
How do We Energies Commercial Customers Obtain Utility Services?
Commercial customers of We Energies must navigate several steps to obtain utility services, as outlined below.
Step 1 – Contact We Energies
To obtain utility services, commercial customers must contact We Energies at (800) 714-7777. A representative from We Energies will walk the customer through the application process, provide them with all required forms, and answer any questions they may have.
Step 2 – Purchase a Surety Bond or Deposit Cash
Commercial customers must purchase a surety bond or deposit cash in an amount equal to the location’s actual or estimated two highest consecutive monthly bills during a 12-month period.
How Do Wisconsin Utility Customers File Their Bonds?
Utility customers in Wisconsin should mail their completed bond forms, including the power of attorney, to We Energies at the following address:
Attn: Deposit Clerk
333 W. Everett St. A130
Milwaukee, WI 53203
The surety bond requires signatures from both the surety company that issues the bond and the customer. The surety company will include the following information on the bond form:
- Name and address of the entity/individual(s) buying the bond
- Surety company’s name
- Bond amount
- Date the bond is signed
What Can Utility Customers in Wisconsin Do to Avoid Claims Against Their Bonds?
To avoid claims on their bonds, utility customers in Wisconsin must ensure they pay their utility bills on time and in full.
What Other Insurance Products Can Agents Offer Utility Customers in Wisconsin?
Wisconsin only requires 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, check out our Surety Bonds vs. Letters of Credit article here.