Who is responsible for the cost of the insurance policies that 360 Painting franchisees are required to maintain?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
evidencing the proper coverage with limits not less than those required hereunder, and all such certificates shall expressly contain endorsements requiring the insurance company to give Franchisor at least 30 days written notice in the event of material alteration to termination, non-renewal, or cancellation of, the coverages evidenced by such certificates and notice of any claim filed under such policy within 30 days after the filing of such claim.
- (iii) If Franchisee at any time fails or refuses to maintain any insurance coverage required by Franchisor or to furnish satisfactory evidence thereof, Franchisor, at its option and in addition to its other rights and remedies hereunder, may, but need not, obtain such insurance coverage on behalf of
Franchisee, and Franchisee shall pay to Franchisor on demand all costs incurred by Franchisor in connection with the placement of such insurance.
- (iv) Franchisee'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 the 2025 360 Painting Franchise Disclosure Document, franchisees are responsible for the cost of maintaining the required insurance policies. The franchisee must secure and maintain these policies at their own expense. These policies must adhere to industry standards and be written by carriers acceptable to 360 Painting, also naming 360 Painting and its affiliates as additional insureds, with the exception of employer's liability or workers' compensation insurance.
The required insurance coverage includes 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 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. The franchisee is responsible for determining the appropriate level of insurance coverage needed to protect their interests and should seek advice from an independent insurance broker.
If a 360 Painting franchisee fails to maintain the required insurance coverage, 360 Painting has the option to obtain the necessary coverage on behalf of the franchisee, and the franchisee is obligated to pay 360 Painting for all costs incurred in securing such insurance. Additionally, franchisees must ensure that any third-party subcontractors they engage also maintain the required insurance coverage, naming 360 Painting as an additional insured. The franchisee must provide evidence of this insurance to 360 Painting upon request.
It is important to note that the insurance coverage amounts specified by 360 Painting are minimums, and franchisees may need to purchase additional coverage to comply with state laws or to adequately protect their business interests. Franchisees must provide certificates of insurance to 360 Painting, proving coverage, at least 30 days before the opening of the business and 30 days before any policy's expiration.