North Carolina Prepaid Entertainment Bond
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How much does a prepaid entertainment surety bond cost in North Carolina?
The cost of a North Carolina prepaid entertainment bond starts at 1% of the total bond amount. However, the exact cost is subject to underwriting, meaning an underwriter will review the applicant’s qualifications prior to determining how much the applicant will pay.
Because the required bond amount varies so much, the best way to find out how much you’ll pay for your bond is to request a free quote.
Why are prepaid entertainment industries required to be bonded?
The North Carolina Attorney General requires prepaid entertainment services to post surety bonds to legally work in the state. The required bond amount is equal to the aggregate value of outstanding liabilities to buyers or $10,000, whichever is greater. The maximum required bond amount is $250,000.
It is required by the provisions of NCGS 66-124 that principals (prepaid entertainment service provides) furnish a bond according to the terms and conditions set forth in Chapter 66, Article 21 of the North Carolina General Statutes. By posting this bond, the principal pledges that he or she and all agents/employees will faithfully and honestly perform and abide by all of the obligations stated in Chapter 66, Article 21 of the North Carolina General Statutes and all current and future amendments.
Specifically, the bond states that “any buyer of prepaid entertainment contract services who suffers or sustains any loss or damage by reason of the closing of a facility or bankruptcy of the seller shall file a claim with the surety, and if the claim is not paid, may bring an action in his own name based on the bond and recover against the surety.”
Pursuant to North Carolina law, examples of prepaid entertainment industries include dance lessons or facilities, social club services, martial arts training, and health or athletic club services.
How long are prepaid entertainment service bonds effective?
North Carolina prepaid entertainment service surety bonds remain continuous and in full force and effect unless otherwise terminated. The surety can cancel the bond and be relieved of further liability by giving 60 days’ written notice of termination to the North Carolina Attorney General’s office in Raleigh, North Carolina.
The required bond amount can be increased or decreased on a semi-annual basis.
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