What is the minimum required property insurance coverage for a 1 800 Packouts franchisee?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
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Insurance. You must obtain and maintain in force insurance coverage 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. We currently require you to maintain the following insurance coverage: (i) commercial general liability insurance ($1 million per occurrence, $2 million general aggregate limit, and $2 million products-completed operations limit, (ii) contractor's environmental liability ($1 million per occurrence and $2 million aggregate limit (aggregate may be shared with CGL policy)), (iii) property insurance (100% of replacement value of Facility and contents), (iv) bailee legal liability coverage ($1 million limit), (v) vehicle liability insurance ($1 million coverage, including hired and non-company owned auto coverage), (vi) workers' compensation coverage, (vii) cyber liability coverage ($1 million limit), (viii) employment practices liability coverage ($1 million limit), and (ix) excess liability coverage (over and above CGL, vehicle liability and employer liability) of $1 million. The 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 we specify and as are is
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 27–29)
What This Means (2025 FDD)
According to 1 800 Packouts' 2025 Franchise Disclosure Document, franchisees must maintain property insurance coverage for 100% of the replacement value of the facility and its contents. This requirement ensures that in the event of damage or loss, the franchisee can fully recover the value of their physical assets.
In addition to property insurance, 1 800 Packouts requires franchisees to maintain several other types of insurance, including commercial general liability insurance, contractor's environmental liability, bailee legal liability coverage, vehicle liability insurance, workers' compensation coverage, cyber liability coverage, employment practices liability coverage, and excess liability coverage. The specific amounts for these other coverages are detailed in the FDD.
The insurance policies must name 1 800 Packouts (and its officers, directors, and employees) as additional insureds and include a waiver of subrogation rights against 1 800 Packouts. Furthermore, the insurance carrier must provide 1 800 Packouts with 30 days' advance written notice of any material modification, cancellation, termination, or expiration of the policy. Franchisees must provide 1 800 Packouts with a copy of the certificate or other evidence of insurance within 30 days after signing the Franchise Agreement and annually thereafter.
1 800 Packouts retains the right to modify the required insurance coverage amounts and types to reflect changes in circumstances such as inflation, new risks, changes in law, or higher damage awards. All insurance policies must be issued by insurance carriers rated not less than "A-" by A.M. Best Company, ensuring the financial stability of the insurer.