FOR ALL YOUR SURETY BOND NEEDS.
These surety bonds are general for all states.
Learn more about health club bonds, and apply today. Absolute Surety offers surety bonds nationwide through a convenient online application system.
Many health clubs collect membership fees from members when they join. Health club bonds ensure that members don’t lose out if their club doesn’t uphold its end of the membership contract, or ceases operations before they have reached the end of their membership.
Because they provide protection for money paid in advance by clients, these bonds—also known as health spa bonds, fitness club bonds, and health studio bonds—are considered a type of financial guarantee bond. Because they are sometimes required as a condition for obtaining a health club license, in some states they also function as license and permit bonds.
Bond requirements for health clubs that collect membership fees in advance differ from state to state. In most states, health clubs with multiple locations must purchase a separate bond for each. Other types of membership-based facilities beyond gyms and fitness centers—such as massage studios, spas, racquetball and tennis clubs, and self-defense schools—may also be required to purchase this type of bond.
Health club members who suffer a financial loss due to the actions of the club have the right to file a claim against the bond. The majority of claims filed against these bonds are due to a club going out of business without returning membership fees that were collected up front.
The surety company will investigate all claims to determine whether they are valid. Only valid claims will be paid. Once a claim has been paid, the health club is legally obligated to repay the surety company.
Each state establishes the required bond amount. The premium an applicant will pay for the bond is determined by the surety company’s underwriters. This is generally based on the bond amount, the applicant’s credit history, and whether the health club collects membership fees for an entire year in advance or on a monthly basis.
Collecting membership fees for an entire year at a time carries a risk of higher claim amounts because more money will be at stake for each member. Consequently, the premium is higher than when membership fees are collected on a monthly basis and there is less money on deposit at any point in time.
If your health club or related business is subject to a bonding requirement in your state, we’ll help you meet it quickly and affordably. Use our convenient online system to apply for a health club bond today!
