For 360 Painting, what insurance requirements must a franchisee ensure their subcontractors meet?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
s obligation to obtain and maintain, or cause to be obtained and maintained, the foregoing policy or policies in the amounts specified shall not be limited in any way by reason of any insurance which may be maintained by Franchisor, nor shall Franchisee's performance of that obligation relieve it of liability under the indemnity provisions set forth in Section 16.1 hereof. Notwithstanding the existence of such insurance, Franchisee, as agreed above, is and shall be responsible for all loss or damage and contractual liability to third persons originating from or in connection with the operation of the Business and for all claims or demands for damages to property or for injury, illness or death of persons directly or indirectly resulting therefrom.
- (v) Franchisee shall not permit any third party sub-contractor to perform any work or offer any services on behalf of Franchisee in respect of the Business unless such sub-contractor maintains insurance coverage in such amounts and types as Franchisee is required to maintain under the provisions of this Section, and such insurance names Franchisor as an additional insured. Franchisee shall maintain evidence of such insurance by its subcontractors and provide such proof of insurance as Franchisor may require in its sole discretion fro
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
According to 360 Painting's 2025 Franchise Disclosure Document, franchisees must ensure that any subcontractors they use maintain insurance coverage in the same amounts and types that the franchisee is required to maintain. This insurance must also name 360 Painting as an additional insured.
The franchisee is responsible for maintaining evidence of this insurance coverage held by their subcontractors. They must also provide proof of this insurance to 360 Painting if requested. This requirement ensures that 360 Painting is protected from potential liabilities arising from the actions of subcontractors.
The minimum insurance policies and coverage amounts that a 360 Painting franchisee must obtain include: comprehensive general liability insurance with a minimum per occurrence coverage of $1,000,000 and general aggregate liability coverage of $2,000,000; auto insurance for vehicles as required by state law; property and casualty insurance; workers' compensation insurance that complies with state statutory requirements; and employer liability coverage with a minimum limit of $500,000. Subcontractors must meet these same minimums.
This requirement is typical in franchising, as franchisors seek to minimize risk and ensure consistent standards across their network. Prospective 360 Painting franchisees should carefully review the insurance requirements and ensure they can comply with these obligations for both their own business and their subcontractors.