The health club industry is worth a staggering $96.7 billion worldwide, according to 2020 statistics. In the US, people have several thousands of health and fitness clubs to choose from. However, what happens when a health club shuts down unexpectedly? What do all the club members do when they’ve paid for its services in advance but no longer have access to them?
Health club bonds exist precisely for this very reason. Many states in the country now legally require health and fitness clubs to obtain a surety bond that protects its members in the event that it closes down. Without obtaining a surety bond, the health will not be allowed to operate legally.
In this piece, we’re going to discuss the specifics of a health club bond. Here’s everything you need to know.
How Much Do You Have to Pay for a Health Club Bond?
Every state has its own specific regulations for health clubs and sets the minimum amount of coverage that’s required. Your bond premium amount will depend on this amount in addition to other factors. For more information on how much you’ll have to pay for a health club bond in your state, get in touch with us to request a quote.
What It Means to be Bonded
When it comes to a surety bond, there are three entities involved:
· Principal: This is the primary entity or individual who’ll be purchasing the surety bond for the health club.
· Obligee: This is the entity that requires the health club to purchase the surety bond. In the case of health club bonds, this is the state.
· Surety: This is the underwriter/financial institution that provides the health club bond. The surety provides the financial backing and will be obligated to pay if there is a valid claim made against the bond.
If the fitness or health club ever goes out of business, the health club bond will protect members who have prepaid for their memberships. Meaning, they will be reimbursed for the fess that they’ve already paid for the duration that they do not get to use their membership.
Apply for a Health Club Bond with us at Surety EZ
If you’re looking to apply for a health club bond in Los Angeles, consider us at Surety EZ. We are a long-standing surety company with an impressive reputation for having a quick, streamlined application process.