New Jersey Health Club Surety Bond

Get Your New Jersey Health Club Surety Bond

Who Is Required To Purchase a New Jersey Health Club Bond?

There are two conditions where the Division of Consumer Affairs requires a health club, gym, or studio to purchase a surety bond.

• If you're offering memberships for longer than 3 months
• If you're collecting for memberships (pre-selling membership) in excess of 3 months

Most of the time, these will be offered together, but not always.

Many health clubs sell contracts that last six to twelve months but collect the payments on a monthly schedule. In this case you would still be required to purchase this health club bond.

 

Why is a New Jersey Health Club Surety Bond Required?

Requirements like these are put in place to protect the public from fraudulent clubs, gyms, or studios.

The Division of Consumer Affairs want to protect the public because you're a business:

• Signing people up for future services you have yet to provide
• Taking people's money up front for a service you have yet to provide

This surety bond, or health club bond, is the primary tool used to hold you accountable to providing these services.

It's unfortunate, but in recent past years, there have been facilities who will purposefully and financially harm their customer by:

• Stealing from customer deposits
• Charging for fraudulent deposits
• Mismanaging fees and prepaid fees for memberships
• Failing to deliver services or taking money after close a facility down

It's because of these fraudulent facilities that the Division of Consumer Affairs requires new health clubs, gyms, and studios to purchase a bond.

If a health club is found guilty of failing to provide services or failing to refund dues for closing early or cancelling a membership contract, the customer can make a claim against the surety bond for financial compensation. Typically for the amount due to them.

However the total amount of compensation for an one or all claims against a health club are limited to the amount of the bond.

 

What Is The New Jersey Health Club Bond Amount?

If your health club, gym, or studio sells future membership contracts the bond amount will be:

• 10% of your health clubs gross income for the last fiscal year
• There is a $25,000 bond minimum
• And a $50,000 bond maximum

If your health club, gym, or studio pre-sells membership for the opening of a facility, the bond amount will be:

• $50,000 during the presell

Once the facility opens, this bond amount will be adjusted to the appropriate amount for the next bond term.

 

How Much Does a New Jersey Health Club Bond Cost?

The price is going to depend on your specific bond amount.

Typically, most surety bonds are credit driven. This means the surety, the insurance company that underwrites health club bonds, custom prices a bond based on:

• The personal credit of the owner or owners
• Business industry and experience
• Prior bond claims if they exist

Using these factors, the surety provides a rate and this rate multiplied by the bond amount is the price you pay.

For the New Jersey health club bond there are two scenarios based on the bond amount.

 

If Your Bond Amount Is Equal To The $25,000 Minimum

We are Surety Bonds Direct and it's our job to make sure you pay the smallest amount for your bond.

We work with the highest A rated sureties to price shop for you and for the $25,000 bond amount we've secured a price of $250 with no credit check.

If you know you have excellent credit, we can use that and maybe get a lower price. Ask your bond specialist for more details at 1-800-608-9950

 

If Your Bond Amount Is Over $25,000 Minimum

Any bond amount over the $25,000 minimum requires the credit check from the businesses ownership.

Let's look at example pricing so you can see how one to two percentage points affect the price you pay.

For example pricing, we'll use a bond amount of $40,000.

Again, it's our job to find you the lowest rate and price. And you can clearly see a one to two percentage point difference can save you hundreds of dollars.

This is money you can send on application fees or facility setup fees.

 

Get Your Personalized Pricing With No Obligation To Buy

All you have to do is complete our online price quote request form and you'll be assigned a bond specialist to help you save money.

The best part is you don't have to purchase from us. So get your pricing by completing the form or you can call a bond specialist at 1-800-608-9950.

 

How Long Does the New Jersey Health Club Surety Bond Last?

Once you're ready to purchase, you can complete our secure online order form. During your purchase, you will choose an effective date.

The effective date is the "active" date.

Once you pay for your bond, our bond issuance team will prepare your bond:

• On the correct bond form
• With the required signatures
• All the required seals
• And the power of attorney

This process typically only takes 1 business day to complete.

The Division of Consumer Affairs will accept a copy of the bond, so we can email it to you.

 

Renewing Your New Jersey Health Club Bond

Your bond will renew 12 months from the activation date you choose when you purchased your bond.

Remember, during this renewal process you can adjust your bond amount so it properly reflects your business.

This includes lowering the bond amount, especially if you are no longer pre-selling memberships.

It's also good to keep in mind that this bond applies to a single location. So if you open a new location and you accept pre-sales, you'll have to get that location bonded as well.

 

Health Club Surety Bonds And Getting Your New Jersey Business License/Registration

Getting your health club or health business registered is not a lengthy process. It mainly consists of these steps:

• Complete the Application for Registration
• Have proof of your business being legally created with the Secretary of State
• Pay the correct fees based on whether you're a bonded club or not
• Purchase your surety bond if it applies to your business
• Provide your business license and Certificate of Good Standing