Michigan Health Club Surety Bonds

Health Club Bonds are underwritten a little more strictly than most other types of commercial bonds. Rather than ensuring compliance with a license, these bonds are a form of financial guarantee. Subsequently, the owner's personal credit is one of the biggest determining factors in what the cost will be.

Owners with excellent credit may be eligible for standard market rates, which range from 1% to 3% of the bond amount.

Applicants with bad credit may find it more difficult to get bonded, as there aren't too many bond companies writing these for higher risk applicants. Annual premium for these applicants can range between 5% to 15% of the bond amount.

For more information on surety bond premium, visit our page on Surety Bond Costs.

First, apply for one. Once you’ve been approved, your licensed agent will provide you with the annual cost, as well as an indemnity agreement with the surety. Once you’ve provided premium and a signed copy of the agreement, your Health Club Bond will issued and sent to you right away."

Yes, but it may negatively impact the price. Not every surety bond company is willing to offer bonds to applicants with bad credit. Applying with a bond agency such as Lance Surety offers you the best chance at getting approved at the lowest possible rate. Reason being, we have relationships with a variety of markets with access to exclusive bad programs not offered by all agencies. "

Most underwriters will want to know whether a health club collects membership dues annually or monthly. Gyms that collect membership fees up front for the year are considered to be a higher risk in the eyes of the surety, as this greatly increases the likelihood of a claim. This may impact the bond cost. "

The most common cause of claim against a Health Club Bond is when a health club owner goes out of business, but fails to return unearned money collected up front via membership fees. This essentially is why the bond is required in the first place, and what it is designed to protect against. If you receive a claim against your bond, contact your bond agency or the surety claims department right away, and take action to get the issue resolved immediately."