License & Permit

Prepaid Entertainment Contract Bond

A bond that a business selling prepaid memberships or lessons, such as a health club or dance studio, posts to protect customers who pay in advance.

Required by

State attorneys general or consumer protection agencies, such as the North Carolina Attorney General

Bond amount

Set by whoever requires the bond. We confirm it.

What this bond guarantees

The bond runs to the state (the obligee) for the benefit of customers. If the facility closes or the seller goes bankrupt, customers who paid for services they did not receive can claim against the bond for their actual losses.

Who needs it

• Health clubs and gyms
• Dance studios
• Martial arts schools
• Dating and social club services

What the underwriter looks at

• Prepaid customer liabilities
• Number of facilities
• Owner credit
• Business financial statements

Requirements vary by state and by who asks for the bond. Send us the request you received and we will confirm exactly what it calls for.

Common questions