Overview of New York Health Club Bond Requirements

To open a health club or spa in the state of New York, you will require a health club bond. The principal amount of the bond you will need to get will depend on the duration of the contracts (memberships) you will offer. For contracts for services up to 12 months, you will need to post a $50,000 bond. For contracts between 12 and 24 months, you will require a $75,000 bond, and for contracts upward of 24 months and up to 36 months, you will require a $150,000 bond.

Certain amounts are also added to the amount of the bond for clubs with three or more locations or for franchises of a common franchisor. See the section on bond cost below for more information!

The purpose of this bond is to guarantee that owners of health clubs and spas will comply with the provisions of the Health Club Services Law (HCSL). In particular the bond guarantees buyers’ right to a refund under the conditions specified in the law. If these conditions are violated by the seller of health club services, a claim can be filed against the bond by consumers.

Under a bond claim, the surety that backs the bond extends compensation to claimants up to the full amount of the bond, also known as its penal sum.

First time getting a bond? Learn about how surety bonds work and why you need one from our detailed ‘What is a surety bond’ guide!

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  • The lowest possible rates
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Find out how much your bond will cost, what can give rise to a claim against this bond, and how to get bonded in the sections below!

Need more information about getting bonded? Call us at (866)-450-3412 anytime!

NY Health Club Bond Cost

The cost of your bond is a small percentage of the total amount of your bond. The principal amounts for this bond are $50,000, $75,000 and $150,000, depending on the duration of the contracts offered by your health club.

In addition, your bond amount may increase if you have three or more locations. The following amounts must be added to the principal amount of your bond, based on the number of locations:

  • $50,000 for 3 or 4 locations
  • $100,000 for 5 or 6 locations
  • $150,000 for 7-9 locations
  • $200,000 for 10 or more locations

The surety you apply with will offer you a bond rate, based on the final amount of your bond. The main factor that influences your bond rate is your credit score. Applicants with high credit scores usually receive the lowest rates. Given the high amounts for this bond, the surety will likely also want to review your business and personal financial statements, and possibly find out more about your assets, liquidity or professional background.

Applicants with scores upward of 700 FICO can expect to get a rate on their bond between .75% and 1.5% of the total amount.

Get a quick estimate of your bond cost through our bond calculator or see the table below for a tentative range.

Bond Cost Based on Credit Score
New York Health Club Bond Surety bond amount Above 700 Between 650-699 Between 600-649 Below 599
Contracts for up to 12 months $50,000 $375-$750 $500-$1,250 $1,250-$2,500 $2,500-$3,750
Contracts for more than 12 and less than 24 months $75,000 $562.5-$1,125 $750-$1,875 $1,875-$3,750 $3,750-$5,625
Contracts for more than 24 months $150,000 $1,125-$2,250 $1,500-$3,750 $3,750-$7,500 $7,500-$11,250

Bad Credit Bond Program

Even if your credit score is currently low you can still get bonded! Simply apply through our Bad Credit Program.

The rate you will need to pay under this program is higher than for applicants with higher scores. This is because applicants with lower credit are perceived as a higher risk by sureties. Yet, you are sure to get increasingly better rates on your subsequent bond applications if you improve your credit score over time.

Learn more about getting bonded with bad credit and request a free bond quote through the program page!

Bond Claims

The Health Club Services Law (HCSL) states that buyers of health club services contracts can file a claim against the bond of a health club in a number of cases. A claim can be filed if the club goes out of business prior to the expiration of a buyer’s contract. A claim can further be filed if the club fails to refund buyers who cancel their contract within the time and the conditions specified in §624 of the HCSL.

When a buyer files a claim against a club’s bond, the surety must investigate the issue and extend compensation for any losses or damages the buyer has suffered. Depending on the nature and amount of these losses, such compensation can be as high as the bond amount itself.

In return, bonded health club service sellers must reimburse their surety for any compensation it extends in such instances. Given the high amounts for these bonds, having to repay one or several bond claims can constitute a big financial burden for sellers of health club services. It is therefore best that sellers always comply with the conditions of the HCSL to avoid giving rise to a claim against their bond.

Get Your NY Health Club Bond Here!

Want to get started with your bond application or simply request a free quote?

Complete our bond application form and we will shortly contact you with a free and exact quote on your bond, along with further details on proceeding with your bond application.

Once we have your final application papers, it will take about two working days for your bond to be issued. After that, we will send you your bond via standard mail and email.

Not ready to apply? Then simply get a free no-obligations quote, so you can see our low prices!

Call us at (866)-450-3412 anytime if you have any questions about this bond or surety bonds in general!


About the author:
Todd Bryant
Todd Bryant is a graduate of Germantown Academy and the University of Pittsburgh College of Business Administration Honors College. He has been President of Bryant Surety Bonds, Inc., an A+ rated Business with the Better Business Bureau, since 2007. Licensed as a producer with the Department of Insurance, he has been published in the National Association of Surety Bond Producers newsletter and on numerous authoritative publications such as The Washington Post, Entrepreneur.com, Azcentral.com and many more.