What minimum coverage is required for business interruption insurance for an Aira Fitness business?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
e event you default in making any such payment, we are authorized, but not required, to pay the same on your behalf and you agree promptly to reimburse us on demand for any such payment.
- B. Insurance. You must maintain in full force and effect throughout the term of this Agreement that insurance which you determine is necessary or appropriate for liabilities caused by or occurring in connection with the development or operation of the Aira Fitness Business. Such insurance must include, at a minimum: (i) special/causes of loss coverage forms, including mechanical/equipment breakdown (previously called "All Risk coverage") on the Aira Fitness Business and all fixtures, equipment and other property used in the operation of the Aira Fitness Business, for full replacement value of the equipment and improvements; (ii) business interruption insurance covering a minimum 12 months loss of income, written on an actual loss sustained basis, including coverage for our monthly fees with us named as a loss payee with respect to those fees; (iii) comprehensive general liability insurance with minimum limits of at least $1,000,000 per occurrence and $2,000,000 aggregate (including product liability and personal and advertising injury) and "Per Location" aggregate limits when multiple Aira Fitness Business locations are insured under one comprehensive general liability policy; (iv) automobile liability insurance, including owned, hired and non-owned vehicle coverage with a minimum combined single limit of at least $1,000,000 per claim; (v) workers' compensation and employer's liability insurance covering all of your employees where required by state statute; (vi) professional liability insurance, including abuse and molestation, with a minimum limit of at least $1,000,000 per occurrence; (vii) Commercial Umbrella Liability of at least $10,000,000 per occurrence and $10,000,000 aggregate with "Per Location" aggregate limits when multiple Aira Fitness Business locations are insured under one comprehensive umbrella liability policy (viii) cyber liability with minimum limits of at least $25,000 per occurrence; (ix) medical expense coverage of at least $1,000 per accident; (x) crime (employee dishonesty, theft and robbery) with minimum limits of at least $10,000 per occurrence; (xi) employment practices liability with minimum limits of at least $100,000 per occurrence and inclusive of both first and third party coverage; (xii) AIRA Fitness Franchising LLC and any entity with an insurable interest that we designate (the "Additional Insureds") must be an additional insured on all liability policies required by this subparagraph to the extent each has an insurable interest; (xiii) each policy of insurance maintained pursuant to this Agreement mu
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to Aira Fitness's 2025 Franchise Disclosure Document, franchisees must maintain business interruption insurance. This insurance should cover a minimum of 12 months of lost income and must be written on an actual loss sustained basis. Additionally, the coverage must include Aira Fitness's monthly fees, with Aira Fitness named as a loss payee specifically for those fees.
This requirement ensures that if an Aira Fitness location experiences an interruption in business due to unforeseen circumstances like a natural disaster or equipment failure, the franchisee will have coverage to replace lost income for up to a year. This helps to stabilize the business during the recovery period. Naming Aira Fitness as a loss payee for the monthly fees ensures that the franchisor continues to receive its payments even when the franchisee's business is disrupted.
Franchisees should carefully review their business interruption insurance policies to confirm that they meet these specific requirements. They should also understand the terms and conditions of the policy, including any exclusions or limitations on coverage. It is also important to note that Aira Fitness can modify the required minimum insurance limits from time to time by written notice to reflect changes in relevant circumstances, industry standards, experiences in the Aira Fitness system, standards of liability and higher damage awards.
Prospective franchisees should consult with an insurance professional to determine the appropriate level of business interruption insurance for their specific Aira Fitness location, taking into account factors such as location, size, and potential risks. Understanding these insurance requirements is crucial for protecting the franchisee's investment and ensuring the long-term viability of the Aira Fitness business.