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Health Club Bond

The gym, health club, and fitness center industry in the U.S. is expected to reach $32 billion in 2022. These facilities help Americans get into shape and maintain their health. Some are a part of nationwide chains, while others may be small and independently owned. But what happens when you have paid a year's worth of membership dues, and then the health club closes down? Health club surety bonds protect members from losing their membership fees if the gym closes down.

If your business needs a health club bond, Viking bond service is here to help. We will guide you through the process and help you to qualify while keeping your costs as low as possible.

What is a Health Club Bond?

A health club bond is a specific type of surety bond designed to protect consumers who pay to join a gym. Many states require businesses to acquire a health club bond to obtain and maintain a license to operate a for-profit health club, health spa, or fitness club. Also known as a fitness center bond, a gym surety bond, or a health spa bond, this bond protects consumers. Typically, health club bonds are required to provide this guarantee that club members will not take a loss due to the club's breach of contract or bankruptcy. In some states, the bond also protects consumers' rights to fee refunds in the circumstances outlined in state statutes.

How Does a Health Club Surety Bond Work?

A health club surety bond is an agreement between three parties:

• Obligee – This is whatever entity creates the obligation to obtain the health club bonds. Typically, it's whatever state agency regulates fitness facilities' safety, but it varies by state. The obligee sets the required bond amounts and determines the circumstances under which people can file a claim on the bond. The obligee works in the general public interest.
• Principal – This is the person who takes out the bond, typically the health club owner. As the principal, you are subject to the rules and penalties assigned by the bond obligee. The state grants you a license to operate legally in exchange for accepting this responsibility.
• Surety – This is the insurance company that underwrites, issues, and administers the health club bond.

If a claim is made against a health club bond, the surety company investigates and pays any valid claims up to the bond's limit. Then the principal must repay the money the surety pays on the claim. The principal has ultimate financial responsibility, but the surety guarantees the money is there so the claim will be paid in a timely manner.

Health Spa Bond Requirements

Health club surety bond requirements vary from state to state. Some, like Alabama and Florida, specify the bond amount for all facilities. $50,000 and $25,000, respectively. In other states, the required bond amount varies. The type of facility required to secure a health spa bond also varies, depending upon each state's definitions.

No matter what state your facility operates in, you will need the following in order to apply for a health spa bond:

• The club's name and DBA
• The physical address and phone number of the facility
• The contact number for the club owner
• The owner's name, address, and social security number
• A credit check of the owner is also required

Who Should Get a Health Club Bond?

Every state defines what it considers a health club and how to license it. Whether or not your business needs a health care bond is up to the applicable state agency. Be aware that some companies that are not typically considered "health clubs" may still be required to obtain a surety bond based on their state's definitions. Here are some examples of businesses that may be required to secure a health club bond:

• Weightlifting or bodybuilding clubs
• Athletic trainers with a dedicated facility
• Tennis and racquetball clubs
• Self-defense schools
• Weight-loss coaching facilities

How Much Does a Health Club Surety Bond Cost?

A health club bond's cost varies depending upon several factors:

• The state the club does business in
• The number of club locations
• The standard length of the club's membership contracts

The health club bond's total can range from as little as $20,000 to above six figures in some instances. Just keep in mind that the bond's cost, the amount you pay, is a small fraction of the bond's value, often just 3-5% of the total.

Two different club owners may also be charged different rates for the same health club bond. Larger bonds have larger costs, of course, but the risks associated with the principal also matter. Principals with poor credit won't automatically be denied, but they may be charged more to secure the same bond. Whatever the health spa bond cost, it must be paid upfront and again annually to keep the bond renewed. If the bond lapses, your health club license could be revoked, among other penalties.

Getting a health club bond is typically simple and quick. In most cases, minimal documentation is needed. Quotes are usually provided on the same day or within 24 hours.

Viking Bond Service provides all the services expected from a leading surety company, along with all the assistance you need to submit an application. Our team is here to help at every step, so don't hesitate to reach out with questions.

Apply for Your Health Club Bond, Today

Don't wait to secure a health club bond that is essential for your business. Viking Bond Service is your surety partner, and we will guide you every step of the way. If you're ready to get started, apply online by completing our online application. If you have questions, feel free to contact us online or give us a call at 1-888-2-SURETY (1-888-278-7389). We're here to assist health club entrepreneurs with all their surety needs. There is no charge or obligation to get the information you need to make a wise choice for your business.