Sewer Authority of Butler Area Sewer Bond

Businesses are required to file a bond with the Sewer Authority of Butler Area (the "Obligee") to activate their license. The bond protects the Obligee by transferring to a surety bond company the cost of ensuring the public is compensated for damages resulting from a licensed business breaking licensing laws.

Sewer Bond

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How much does the Sewer Authority of Butler Area Sewer bond cost?

Sewer Authority of Butler Area Sewer bonds cost 0.5% of the bond amount.

Is a Credit Check Required for Sewer Authority of Butler Area Sewer Bonds?

Credit checks are not required for the Sewer Authority of Butler Area Sewer bond.

Why is the Sewer Authority of Butler Area Sewer bond required?

Businesses are required to purchase and file a bond with the Sewer Authority of Butler Area to activate their license. The bond protects the Obligee by transferring to a surety bond company the cost of ensuring the public is compensated for damages resulting from the failure of a licensed business complying with the provisions of licensing laws.

How does the Sewer Authority of Butler Area Sewer bond work?

Sewer Authority of Butler Area Sewer bonds must be issued by an insurance carrier admitted by the PA Department of Insurance. The insurance company issuing any surety bond, such as the Sewer Authority of Butler Area Sewer bond, will also be referred to as the “surety company” or the “bond company”. The business is referred to as the Principal, the surety bond company as the Obligor and the Sewer Authority of Butler Area as the Obligee.

The surety company provides the Obligee a guarantee (the surety bond) that the customers, vendors and employees of a licensed business will receive payment for financial damages due to a violation of licensing law up the bond amount stated on the bond form (“penal sum”). The bond company also directly receives claims from the public and determines the validity of claims. Ultimately, the licensed business owners are responsible for their actions and required by law to reimburse the surety company for any payments made under the bond or face indefinite license suspension.