South Carolina Physical Fitness Center Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a South Carolina Physical Fitness Center bond.
At a Glance:
- Lowest Cost: $150 per year or $15 per month
- Bond Amount: Based on the number of members the center has (more on this later)
- Who Needs it: All physical fitness centers operating in South Carolina that offer prepaid or credit-based contracts for at least 3 months or $200
- Purpose: To ensure members will receive compensation for financial harm if the center fails to provide all services that have been paid for
- Who Regulates Physical Fitness Centers in South Carolina: The South Carolina Department of Consumer Affairs
Background
South Carolina Statute 44-79-80 requires all physical fitness centers operating in the state to file a Certificate of Authority (COA) with the Department of Consumer Affairs. The South Carolina legislature enacted the COA requirement to ensure that fitness centers engage in ethical business practices. To provide financial security for the enforcement of the COA law, physical fitness centers that allow members to purchase 3 months or $200 worth of prepaid services must purchase and maintain a surety bond to be eligible for a COA.
What is the Purpose of the South Carolina Physical Fitness Center Bond?
South Carolina requires physical fitness centers to purchase a surety bond as a prerequisite to obtaining a COA. The bond ensures that consumers who purchase services before receiving them will receive compensation for financial harm if the center fails to abide by the regulations outlined in South Carolina Statute 44-79-80. Specifically, the bond protects consumers if the center fails to offer refunds for all services that have been paid for but not received. In short, the bond is a type of insurance that protects the consumers if the physical fitness center does not provide services that have been paid for and fails to issue refunds.
South Carolina Physical Fitness Center Bond Form
How Can an Insurance Agent Obtain a South Carolina Physical Fitness Center Surety Bond?
BondExchange makes obtaining a South Carolina Physical Fitness Center bond easy. Simply login to your account and use our keyword search to find the “Fitness Center” 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.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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How is the Bond Amount Determined?
The required amount on the South Carolina Physical Fitness Center bond is determined based on the number of members the center has, as outlined below:
| Number of Members | Bond Amount |
|---|---|
| 1,500+ | $50,000 |
| 1,000 to 1,499 | $40,000 |
| 500 to 999 | $30,000 |
| 100 to 499 | $20,000 |
| 1 to 99 | $10,000 |
Is a Credit Check Required for the South Carolina Physical Fitness Center Bond?
Surety companies will run a credit check on the owners of the fitness center to determine eligibility and pricing for the South Carolina Physical Fitness Center 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 South Carolina Physical Fitness Center Bond Cost?
The South Carolina Physical Fitness Center bond can cost anywhere between 1.5% to 7.5% 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 Physical Fitness Center Bond Cost
| Credit Score | Bond Cost (1 year) | Bond Cost (1 year) |
|---|---|---|
| 800+ | $150 | $15 |
| 650 – 799 | $200 | $20 |
| 600 – 649 | $400 | $40 |
| 550 – 599 | $750 | $75 |
*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?
South Carolina requires physical fitness centers that offer prepaid or credit-based contracts for at least 3 months or $200 to purchase a surety bond as a prerequisite to obtaining a COA. To paraphrase South Carolina Statute 44-79-20, a physical fitness center is a facility that provides consumers with the resources needed to increase their physical fitness through exercise and/or weight control. The term applies to all:
- Health and exercise centers, clubs, studios, or classes
- Health spas
- Weight control centers, clinics, or studios
- Figure salons
- Tanning centers
- Athletic or sports clubs
The term does not include rehabilitative therapy administered by a licensed physical therapist.
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 South Carolina Physical Fitness Centers Apply for a Certificate of Authority?
Physical fitness centers in South Carolina must navigate several steps to obtain a COA. Below are the general guidelines, but applicants should refer to the application instructions for details on the process.
Renewal Period – All South Carolina Physical Fitness Center Certificates of Authority expire annually and must be renewed before the expiration date
Step 1 – Complete the Application
All South Carolina Physical Fitness Center COA applications should be filed online here or mailed to the following address:
Department of Consumer Affairs
P.O. Box 5757
Columbia, SC 29250-5757
Physical fitness centers must complete the application in its entirety, and submit the following items:
-
- $50 filing fee (per location)
- Copy of the most recent membership agreement
- Copies of all contracts used
- Company formation documents
- Rate sheet/price schedule for all services offered
Step 2 – Purchase a Surety Bond
Physical fitness centers must purchase and maintain a surety bond (limits outlined above).
How do South Carolina Physical Fitness Centers Renew Their COAs?
Physical fitness centers should file their completed renewal applications, including a $50 filing fee (per location), online here or mail them to the following address:
Department of Consumer Affairs
P.O. Box 5757
Columbia, SC 29250-5757
All South Carolina Physical Fitness Center Certificates of Authority expire annually and must be renewed before the expiration date.
What are the Insurance Requirements for Physical Fitness Centers in South Carolina?
South Carolina does not require physical fitness centers to purchase any form of liability insurance as a prerequisite to obtaining a state license. However, physical fitness companies may be required to obtain insurance before being issued a local business or tax license. Physical fitness centers must purchase and maintain a surety bond (limits outlined above).
How do South Carolina Physical Fitness Centers File Their Bonds?
Physical fitness centers should submit their completed bond forms, including the power of attorney, to the following address:
Department of Consumer Affairs
P.O. Box 5757
Columbia, SC 29250-5757
The surety bond requires signatures, including witness 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 and address of the entity/individual(s) buying the bond
- Surety company’s name and address
- Bond amount
- Date of the bond is signed
What Can South Carolina Physical Fitness Centers do to Avoid Claims Made Against Their Bonds?
To avoid claims against their bonds, physical fitness centers in South Carolina must ensure that they provide all services that have been paid for and offer refunds in the event they cannot.
What Other Insurance Products Can Agents Offer Physical Fitness Centers in South Carolina?
Most reputable physical fitness centers 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 Physical Fitness Center Customers?
South Carolina conveniently provides a list of active physical fitness centers in the state. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.