Can 1 800 Packouts increase the minimum amount of insurance coverage required for franchisees?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
(1) During the Term, you will be required to maintain certain insurance. During the Term, you must maintain in force at your sole expense such insurance as is necessary to comply with all laws and as is customary for similar businesses in the state or jurisdiction in which the Franchised Business operates or as we may reasonably prescribe from time to time, including but not limited to workers' compensation, public liability and property damage, professional liability, business interruption and general and umbrella coverages. Such insurance coverage must be maintained under one or more policies of insurance of the types and containing such terms and conditions and minimum liability protection in such amounts, as are specified from time to time by us and issued by insurance carriers rated "A+" by A.M. Best Company. We may from time to time increase the minimum amount of coverage required under any policy, and require different or additional kinds of insurance to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards or other relevant changes in circumstances. All insurance policies required hereunder must name us and our officers, directors and employees as additional insureds, contain a waiver by the insurance carrier of all subrogation rights against us and must provide that we will receive 30 days' advance written notice of termination, expiration or cancellation or modification of any such policy. A detailed list of our minimum insurance requirements is included in our Manuals, which we may modify from time to time.
- (2) You must furnish to us within 30 days after execution of this Agreement and each year thereafter a copy of the certificate of or other evidence of the procurement, renewal or extension of each such insurance policy upon receipt (or binder, pending receipt of each such policy).
- (3) Your obligation to obtain and maintain the insurance described above will not be limited in any way by reason of any insurance we maintain, nor will your performance of such obligations relieve you of any obligations under Section 8 (Indemnification) of this Agreement.
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to 1 800 Packouts's 2025 Franchise Disclosure Document, 1 800 Packouts can increase the minimum amount of insurance coverage required for franchisees. During the franchise term, franchisees must maintain insurance as required by law and customary for similar businesses, including workers' compensation, public liability, property damage, professional liability, business interruption, and general and umbrella coverages. These policies must be issued by insurance carriers rated "A+" by A.M. Best Company.
1 800 Packouts may increase the minimum coverage amounts or require different or additional kinds of insurance to reflect inflation, new risks, changes in law, higher damage awards, or other relevant changes. All insurance policies must name 1 800 Packouts and its personnel as additional insureds and include a waiver of subrogation rights against 1 800 Packouts. Additionally, 1 800 Packouts must receive 30 days' advance written notice of any policy termination, expiration, cancellation, or modification. A detailed list of minimum insurance requirements is included in the 1 800 Packouts manuals, which may be modified.
Franchisees must provide 1 800 Packouts with a copy of the certificate or other evidence of insurance procurement, renewal, or extension within 30 days of the franchise agreement's execution and annually thereafter. The franchisee's obligation to maintain insurance is not limited by any insurance that 1 800 Packouts maintains, nor does it relieve the franchisee of their indemnification obligations under the franchise agreement.