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A health club bond is a type of surety bond required by health clubs that wish to collect fees from members upfront. This type of surety bond is a financial guarantee in the case that the health club closes unexpectedly, ensuring all prepaid members would be reimbursed. Many states require health clubs to obtain a health club bond before being legally licensed to open.
The cost of health club bonds varies based on state regulations. Some states may require different bond amounts depending on prepaid membership terms. Some health clubs may offer 12-month memberships paid in advance, 12-24 month memberships, or even up to 36- month prepaid memberships. Depending on the type of prepaid memberships your health club plans to offer and specific state requirements your total bond cost could range anywhere from $50,000 to $150,000. Health club owners will not be required to pay for the entire bond cost, rather just the bond premium which is usually between 1-4% depending on the owner’s credit and financial history.
Health club bonds are required as a financial guarantee to protect members of the club from any financial loss in the case that the club closes down unexpectedly. The health club bond binds three parties together, just like every surety bond. The principal is the health club owner or operator who is responsible for obtaining the health club bond. The obligee is the state or local government that requires the bond and the surety is the agency responsible for underwriting the bond and providing the guarantee.
While many people would assume health clubs consist of only gym-style clubs, this is not the case. Health clubs can be any of the following institutions and depending on the state in which you wish to open your business, a health club bond may be required:
Bonding Solutions is a leading national surety agency with the authority to underwrite health club bonds in all required states. Whether you are just starting your research or you are ready to apply for your bond today, our agents are here to help! We provide fast approval and affordable rates for health club owners and operators looking to obtain a health club bond. Get the best rates on the market today and obtain your bond fast when you choose Bonding Solutions. We help make sure your business continues to run smoothly!
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