Cosmetology Esthetics Barber School Bonds

What is a cosmetology school bond?

Cosmetology school bonds (also known as barber school bonds, esthetics bonds, or manicure school bonds) are legally binding agreements between three parties: cosmetology schools, the government agency responsible for regulating commercial barbering and manicuring in the local jurisdiction, and a surety company.

The government agency is the Obligee and establishes the obligations that the licensed cosmetologist (the Principal) must follow. The surety (also called bonding company) issues the bond guaranteeing the performance of the licensee.

Why do you need a cosmetology school bond?

Cosmetology school bonds are necessary in some states as part of the licensure requirements to operate a training school for cosmetologists or estheticians. The bonds help protect each student's prepaid tuition if the school were to stop operating or breach its enrollment contract with the students.

When the surety company issues the bond, they provide the government agency a guarantee that the customers of a licensed cosmetology school will receive payment for financial losses resulting from a violation of the statutes set forth by the school license.

If the cosmetology school fails to meet the obligations set out by the government agency, the surety will pay out damages up to the bond amount. The licensed cosmetologist is liable for the losses and is legally required to reimburse the surety company for any damages paid under the bond.

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How much does a cosmetology school bond cost?

Cosmetology school surety bond costs vary depending on the total bond amount and the premium rate. The government agency sets the required bond amount as either a fixed amount or a percentage of gross tuition receipts. The surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium. 

Premium rates for cosmetology school bonds usually cost between 0.75% and 5% of the total bond amount. Most cosmetology school bonds require a credit check but the surety company ultimately decides how to underwrite the bond.

During the application process, the surety company may evaluate your credit score, financial strength, and industry experience. Applicants with good credit generally receive the lowest rates, however, bad credit will not prevent you from securing a cosmetology school bond. EZ Surety still offers competitive rates to individuals with low credit scores or other financial issues. For cosmetology school bonds with a total bond amount of $10,000, EZ Surety can issue premiums as low as $100.


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