New York Health Club Bond Overview
- Purpose: To protect prepaying members from loss if a health club closes or fails to refund after cancellation
- Who Needs It: Gym, spa and other health club owners in New York
- Regulating Body: The New York Department of State — Division of Licensing Services
- Bond Amount: $50,000 to $350,000 based on membership contract lengths and number of locations
- Minimum Price: 1% of coverage amount
What Is a New York Health Club Bond?
New York health club bonds are a form of financial security for health club members and the state. They protect prepaid membership fees if a club closes and fails to refund unfulfilled contracts.
Health club bonds also ensure owners fulfill client contracts and uphold obligations according to New York Legislation.
Who Needs a Health Club Bond?
The New York Department of State — Division of Licensing Services requires all health club owners to have a surety bond, irrevocable letter of credit, or certificate of deposit.
In New York, a health club is defined as any person or entity that offers physical fitness instruction and facilities. By this definition, health clubs include, but are not limited to, the following types of businesses:
- Health spas
- Sports groups
- Tennis and racquet ball facilities
- Health clubs or studios
- Figure salons
- Gyms
- Weight control studios
- Martial arts and self defense schools
Bond Coverage Requirements for New York Health Clubs
The coverage amount is determined by the membership term length your club sells and the number of locations you have. View the charts below for specific coverage requirements:
| Contract Term Length | Required Coverage |
|---|---|
| Less than 12 months | $50,000 |
| 12–24 months | $75,000 |
| 24–36 months | $150,000 |
Your coverage will be based on membership contracts initially. However, if you have more than three locations the following amounts will be added to your bond amount:
| Number of Locations | Additional Coverage |
|---|---|
| 3–4 locations | $50,000 |
| 5–6 locations | $100,000 |
| 7–9 locations | $150,000 |
| 10+ locations | $200,000 |
For example, if your health club sells 18-month gym memberships, you’ll need a $75,000 bond. But if you also have five locations, you’ll need $100,000 in additional coverage. This means you’ll need a $175,000 surety bond.
How Much Do Health Club Bonds Cost in New York?
Health club bonds are underwritten, meaning you’ll need to apply and undergo a soft credit check. Premiums typically range from 1% to 3%.
For example, if you need a $50,000 bond and qualify for a 1% premium, you’ll pay just $500. Apply for a free quote today!
SuretyBonds.com offers the lowest available rates from our nationwide provider network with no added fees.
How Does a New York Health Club Bond Work?
When you get a health club bond, you enter a three-party agreement.
| Bond Party | Description |
|---|---|
| 1. Principal | You, the health club owner |
| 2. Obligee | The NY Department of State |
| 3. Surety | The issuing surety provider |
By agreeing to this contract, you promise to fulfill client membership contracts. If contract terms are broken, the surety will pay harmed parties and you must later reimburse the surety.
How Do I Get a Health Club Bond in New York?
To get your New York health club bond, just follow these simple steps:
- Determine the coverage you need
- Apply for a quote online
- Pay the premium
- File your bond with the NY Department of State
How Fast Can I Get My Bond?
We issue premium quotes in one business day. However, New York requires you to file a physical bond form.
You’ll get your bond in the mail between one and four business days depending on which shipping method you select at checkout. We offer overnight, two-day and three-day shipping.
How Do I File My Bond?
After getting your bond in the mail, file it by mailing to the following address:
NYS Department of State
Division of Licensing Services
P.O. Box 22001
Albany, NY 12201-2001
Can I Get Bonded With Bad Credit?
We approve 99% of applicants. If you’re worried about qualifying, read about our Bad Credit Options. Typically, you can still get bonded with a low credit score, you’ll simply pay a higher premium rate.
How Do I Renew My Health Club Bond?
New York health club bonds expire annually. We send periodic renewal reminders starting 90 days before the expiration date.
To renew your bond, just follow the instructions in the text and email reminders. Pay your invoice using the provided link, or call 1(800)-398-4358 to pay over the phone.
How Do I Update My Bond Information?
Update your bond by calling 1(800)-308-4358 or emailing [email protected]. A representative will issue you a bond rider form for small updates like name and address.
*Note: Larger changes may require a new bond form.
Requirements to Open a Health Club in New York
Unlike other states, you do not need to apply for a license to open a health club. Instead, just file an irrevocable letter of credit, certificate of deposit or surety bond.
