North Carolina Beauty School Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a North Carolina Beauty School bond
At a Glance:
- Lowest Cost: $100 per year or $10 per month
- Bond Amount: Minimum of $10,000 (more on this later)
- Who Needs it: All private beauty schools, a.k.a cosmetic art schools, operating in North Carolina
- Purpose: To ensure that students will receive compensation for financial harm if the school fails to provide all services that have been paid for
- Who Regulates Private Beauty Schools in North Carolina: The North Carolina Board of Cosmetic Art Examiners
Background
North Carolina Statute 88B-16 requires all beauty schools operating in the state to obtain a license from the Board of Cosmetic Art Examiners. The North Carolina legislature enacted the licensing requirement to ensure that private beauty schools engage in ethical business practices and are qualified to provide instruction. To provide financial security for the enforcement of the licensing law, private beauty schools must purchase and maintain a surety bond to be eligible for licensure.
What is the Purpose of the North Carolina Private Beauty School Bond?
North Carolina requires private beauty schools to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that students will receive compensation for financial harm if the school fails to comply with the regulations outlined in North Carolina Statute 88B-17. Specifically, the bond protects students if the school ceases operations and fails to provide refunds for services that have been paid for but not received. In short, the bond is a type of insurance that protects students if the private beauty school violates the terms of its license.
How Can an Insurance Agent Obtain a North Carolina Beauty School Surety Bond?
BondExchange makes obtaining a North Carolina Beauty School bond easy. Simply login to your account and use our keyword search to find the “Beauty School” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.
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How is the Bond Amount Determined?
North Carolina Statute 88B-16 dictates that the bond amount must be equal to the maximum amount of prepaid tuition held by the school at any point during the last fiscal year. However, the bond must be a minimum of $10,000.
Is a Credit Check Required for the North Carolina Private Beauty School Bond?
Surety companies will run a credit check on the owners of the school to determine eligibility and pricing for the North Carolina Private Beauty School bond. Owners with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit,” meaning that the credit check will not affect the owner’s credit.
How Much Does the North Carolina Private Beauty School Bond Cost?
The North Carolina Private Beauty School bond can cost anywhere between 1% to 12.5% of the bond amount per year. Insurance companies determine the rate based on several factors including your customer’s credit score and experience. The chart below offers a quick reference for the cost of a $10,000 bond requirement.
$10,000 Private Beauty School Bond Cost
| Credit Score | Bond Cost (1 year) | Bond Cost (1 month) |
|---|---|---|
| 720+ | $100 | $10 |
| 680 – 719 | $150 | $15 |
| 650 – 679 | $200 | $20 |
| 600 – 649 | $400 | $40 |
| 550 – 599 | $750 | $75 |
| 500 – 549 | $1,250 | $125 |
*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.
Who is Required to Purchase the Bond?
North Carolina requires private beauty schools, a.k.a cosmetic art schools, to purchase a surety bond as a prerequisite to obtaining a business license. To paraphrase North Carolina Statute 88B-B2, a cosmetic art school is an organization that instructs students on any of the following topics:
- Cosmetology
- Esthetics
- Natural hair care
- Manicuring
Schools that teach how to perform massages or bodywork therapy are exempt from this definition.
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How do North Carolina Private Beauty Schools Apply for a License?
Private beauty schools in North Carolina must navigate several steps to obtain a license. Below are the general guidelines, but applicants should refer to the application form for details on the process.
License Period – All North Carolina Cosmetic Art School Licenses expire on October 1 of each year and must be renewed before the expiration date
Step 1 – Contact the Board of Cosmetic Art Examiners
Before applying for a license, North Carolina cosmetic art schools should contact the Board of Cosmetic Art Examiners. The board will walk the school through the application process, provide them with all required forms, and answer any questions they may have.
Step 2 – Purchase a Surety Bond
First-time license applicants must purchase and maintain a $10,000 surety bond
Step 3 – Complete the Application
All North Carolina Cosmetic Art School License applications should be mailed to the following address:
North Carolina Board of Cosmetic Art Examiners
121 Edinburgh Drive South Suite 209
Cary, NC 27511
Schools must complete the application in its entirety and submit the following items:
-
- Surety bond
- Diagram, including equipment placement, of the school’s facility
- Course curriculums and teacher trainee programs
- Plans for record keeping of all student hours and performances as well as minimum course requirement qualifications
- Performance evaluation standards
- Student handbook
- School’s raised seal
- Proof of local plumbing/electrical approval
- School operation schedule
Schools are required to pay a $60 fee when submitting their applications.
How do North Carolina Private Beauty Schools Renew Their Licenses?
Schools can submit their completed renewal applications, including a $60 fee, online here or mail them to the following address:
North Carolina Board of Cosmetic Art Examiners
121 Edinburgh Dr S, Suite 209
Cary, NC 27511
All North Carolina Cosmetic Art School Licenses expire on October 1 of each year and must be renewed before the expiration date.
What are the Insurance Requirements for Private Beauty Schools in North Carolina?
North Carolina does not require private beauty schools to purchase any form of liability insurance as a prerequisite to obtaining a business license. Private beauty schools must purchase and maintain a surety bond (limits outlined above).
How Do North Carolina Private Beauty Schools File Their Bonds?
Private beauty schools should submit their completed bond forms, including the power of attorney, to the following address:
200 West Jones Street
Raleigh, NC 27603
The surety bond requires signatures from both the surety company that issues the bond and the applicant. The surety company should include the following information on the bond form:
- Legal name of the entity/individual(s) buying the bond
- Surety company’s name and state of incorporation
- Bond amount
- Date the bond goes into effect
- Date the bond is signed
What Can North Carolina Private Beauty Schools do to Avoid Claims Made Against Their Bonds?
To avoid claims against their bonds, private beauty schools in North Carolina must ensure that they issue refunds for all services that have been paid for but not received.
What Other Insurance Products Can Agents Offer North Carolina Private Beauty Schools?
Most reputable private beauty schools will purchase liability insurance. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for North Carolina Private Beauty School Customers?
North Carolina conveniently provides a public database of active beauty schools in the state. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.