What happens if my business energy supplier goes bust?

Your energy stays on

According to Ofgem, you don't need to do anything to keep the lights on. It picks a replacement through a competitive process, usually within a few days and no more than 14. In rare cases an administrator runs the existing supplier instead, and you can switch away.

What to do straight away

1. Take a meter reading and keep it.
2. Wait for the new supplier to contact you; don't switch in the meantime. A switch already underway will go ahead.
3. The new supplier will deal with your direct debit. Ofgem says you can cancel it before the new supplier contacts you if you want, and set up a new one later; if an administrator is running the old supplier instead, do not cancel it.
4. If you have a smart meter, you may need to submit readings for a while.

Your contract and prices

Your old tariff ends when the new supplier takes over, and you go onto a deemed contract you didn't choose. Its rate can be higher. The good news is you can switch to another deal or supplier at any time without exit fees. See how to get off deemed rates and our full guide, what happens if a business energy supplier goes bust.

Money: credit and debt

This is where business differs from households. Ofgem says its safety net doesn't protect business credit balances. It will try to get the new supplier to take on some or all of the credit, but that isn't guaranteed. Otherwise you would generally claim from the failed supplier's administrator, like any creditor.

If the new supplier takes on your debts, you pay them. If not, you may still owe the old supplier or its administrator.

Example: you are £1,200 in credit with the failed supplier. The new supplier may confirm a balance, or you may have to claim as a creditor. Don't count on it; so avoid paying large amounts in advance. Large balances in credit are a risk worth watching, and our credit balance refund guide helps.

Security deposits

Ofgem's guidance for businesses does not say what happens to a security deposit held by a failed supplier, so do not assume it is safe. Ask the new supplier whether it has taken on the deposit, and if not, ask the administrator how to claim. See whether deposits are refundable.

Avoiding the worst outcomes

You cannot predict a failure, but you can limit exposure. Avoid paying months in advance unless you must. Keep monthly meter readings so a new supplier starts from accurate figures. Store contracts and bills somewhere you control, not only in a supplier's online account, as websites may disappear. Ofgem says account records pass to the new supplier, which will confirm any credit or debt and explain how it will be settled, but your own copies save time.

Frequently confused points

• A supplier failure is not a reason to stop paying; wait for the new supplier's instructions.
• Your old fixed price does not carry over.
• You are not trapped: the new deemed contract has no exit fee.

Next steps

• Keep your readings, bills and contract.
• Raise any open complaint again with the new supplier.
• Compare deals once settled; see how to switch.