What is a health club surety bond?

In many states, health clubs must be bonded. This type of bond protects customers of the health club. Protection includes the fees paid for a membership will be repaid if the gym shuts down. If the gym shuts down, the bond will repay the fees paid by the member. Health club owners are required to be bonded so if  any fraudulent or illegal actions are committed by employees or owners of the health club, customer will not take the financial or legal fall.

Examples of places that would need to be bonded include spas, fitness clubs, martial arts studios, gyms, health spas, etc. Most states require one bond for each health club location. State laws should be checked to ensure the bond application is compliant with state laws and regulations.

Image result for gym clip art

Cost for this bond.

The cost for this bond referred to as the bond premium depends on multiple factors. Since this type of bond is a financial guarantee, the bond premium will be a little higher than other types of bonds. Most commercial bonds only ensure compliance with a business license, however this bond covers financial liability also.  The greatest factor that plays into the bond premium is the personal credit of the applicant also known as the principle. The better the credit, the lower the premium. Although, achieving this bond type with bad credit is possible.

The bond cost will also depend on how often membership dues are collected by the health club. Underwriters believe membership fees that are collected in full at the beginning of the year are more of a risk. In the view of an underwriter, a higher risk principle means a higher risk of a claim taken against the bond. So, health clubs that collect a lump sum at the beginning of the year will face a higher  premium.

 

Find the surety bond that you need to get the jobs you deserve.

Contact Surety1 today and get started with a bond application to help your business thrive.


Get Started