What is the minimum required vehicle liability 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 issued by insurance carriers rated not less than "A-" by A.M. Best Company.
You must maintain these policies during the entire term of your Franchise Agreement. We may increase or decrease the amounts of coverage required under these insurance policies and require different or additional kinds of insurance at any time 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 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 any material modification, cancellation, or termination or expiration of the policy. You must provide us with a copy of the certificate of or other evidence of the procurement, renewal or extension of each insurance policy withi
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 27–29)
What This Means (2025 FDD)
According to 1 800 Packouts's 2025 Franchise Disclosure Document, franchisees must maintain vehicle liability insurance coverage of $1 million, which includes coverage for hired and non-company owned vehicles. This insurance is one component of a broader set of insurance requirements that 1 800 Packouts mandates for its franchisees.
In addition to vehicle liability, 1 800 Packouts requires franchisees to hold other insurance policies, including commercial general liability insurance, contractor's environmental liability, property insurance, bailee legal liability coverage, workers' compensation coverage, cyber liability coverage, employment practices liability coverage, and excess liability coverage. The franchisor specifies that all insurance coverage must be maintained with insurance carriers rated not less than "A-" by A.M. Best Company, ensuring a certain level of financial stability and reliability of the insurer.
1 800 Packouts retains the right to modify the required insurance coverage amounts or types at any time to reflect changes such as inflation, new risk identification, legal changes, or higher damage awards. Franchisees must name 1 800 Packouts (including its officers, directors, and employees) as additional insureds on all policies and ensure the insurance carrier waives subrogation rights against 1 800 Packouts. Furthermore, 1 800 Packouts must receive 30 days' advance written notice of any material changes, cancellations, or expirations of the insurance policies. Franchisees are required to provide copies of insurance certificates or other evidence of coverage to 1 800 Packouts within 30 days of signing the Franchise Agreement and annually thereafter.