What is the All Team franchisee required to do to protect ATFC from liabilities arising from the franchisee's operation of the agency?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. Indemnification. Under no circumstances shall ATFC be liable for any act, omission, debt, or other obligation of FRANCHISEE. FRANCHISEE will indemnify, defend and save harmless ATFC and its employees, agents, officers, directors, parents, subsidiaries, affiliates, successors and assigns ("Indemnitees") from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, costs and expenses (including without limitation legal fees and expenses) of any kind and nature whatsoever, including without limitation damages or injuries suffered by Indemnitees, which may be imposed on, incurred by or asserted against the Indemnitees in any way arising out of the acts or omissions of FRANCHISEE or its employees, agents, officers, directors, parents, subsidiaries, affiliates, successors and assigns ("Indemnitors") pursuant to or in connection with the operation of the Agency regardless of whether the Indemnities were negligent or that said negligence was a contributing factor in the liability (to the extent permitted by law).
FRANCHISEE will purchase and continuously maintain during the term of this Agreement the following described insurance coverages, and will furnish to ATFC evidence of such insurance as ATFC shall reasonably request, together with information concerning claims and losses under such insurance.
All policies of insurance required to be provided and maintained by FRANCHISEE by this Agreement must be carried with such responsible insurance companies and be in such form as is reasonably satisfactory to ATFC.
ATFC has the right to require FRANCHISEE to increase the types and amounts of insurance coverage as ATFC may, in its sole discretion, reasonably require.
In the event ATFC exercises its right to increase insurance coverage requirement hereunder, FRANCHISEE shall have thirty (30) days from the date of receipt of written notice from ATFC to comply with the new insurance coverage requirements as set forth in such notice and provide evidence of such coverage.
Workers' Compensation Insurance and Employers' Liability Insurance, as required by law or regulation for statutory limits to cover regular employees of the Agency as well as temporary employees with minimum limits of $1,000,000 per occurrence.
General Liability Insurance with a minimum limit of $1,000,000 per occurrence and $2,000,000 in the general aggregate.
Personnel Consultant's Errors and Omission Insurance in the amount of $1,000,000.
Non-owned automobile insurance with a combined single limit of liability for each accident of not less than $1,000,000.
Employee Practices Liability insurance with minimum limits of $2,000,000 per claim and in the aggregate.
Employee Dishonesty/Blanket Crime Insurance covering loss to customer property caused by temporary workers with a minimum limit of $1,000,000 per occurrence.
Blanket Fidelity Bond for temporary help services with $10,000 limit of liability.
All general liability insurance policies will name ATFC, its affiliates and its successors and assigns, and National Accounts (as applicable) as additional insured and will provide that ATFC must receive thirty (30) days prior written notice of any termination, expiration or cancellation of the insurance policy. Each year FRANCHISEE must provide ATFC with a certificate or other evidence of FRANCHISEE's compliance with the insurance requirements. If FRANCHISEE fails to maintain such insurance, ATFC may procure such insurance on FRANCHISEE's behalf and will be entitled to reimbursement from FRANCHISEE for ATFC's costs to do so, in addition to any other rights and remedies ATFC may have under this Agreement. However, ATFC is not obligated to obtain such insurance on FRANCHISEE's behalf. In any event, FRANCHISEE will be charged a penalty of $500 per month and prohibited from operating the Agency until the required Certificate of Insurance is received by ATFC. Regardless of the amounts set forth above, it will be FRANCHISEE's responsibility to maintain adequate insurance coverage at all times during the term of and after the expiration of this Agreement. FRANCHISEE recognizes that the levels of insurance described above are merely a minimum requirement. FRANCHISEE should determine if additional insurance is necessary through consultation with its advisors. FRANCHISEE's failure to maintain coverage will not relieve FRANCHISEE of any contractual responsibility or obligation or liability under this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, franchisees must take several steps to protect All Team from liabilities related to the operation of their agency. These measures primarily involve indemnification and maintaining specific insurance coverage.
First, the franchisee is required to indemnify, defend, and hold harmless All Team and its related parties from any liabilities, losses, damages, penalties, claims, actions, costs, and expenses arising from the franchisee's acts or omissions. This includes legal fees and expenses, regardless of whether All Team was negligent. This means the franchisee is responsible for covering All Team's costs if they are sued or incur expenses due to the franchisee's business operations.
Second, the franchisee must purchase and maintain various insurance coverages throughout the term of the agreement. These include Workers' Compensation Insurance, General Liability Insurance ($1,000,000 per occurrence and $2,000,000 in the general aggregate), Personnel Consultant's Errors and Omission Insurance ($1,000,000), Non-owned automobile insurance ($1,000,000 per accident), Employee Practices Liability insurance ($2,000,000 per claim and in the aggregate), Employee Dishonesty/Blanket Crime Insurance ($1,000,000 per occurrence), and a Blanket Fidelity Bond ($10,000 limit of liability). All Team has the right to increase the required insurance coverage, and the franchisee must comply within 30 days of written notice.
The franchisee must name All Team as an additional insured on general liability insurance policies and provide All Team with a certificate of insurance annually. Failure to maintain the required insurance can result in All Team procuring insurance on the franchisee's behalf, with the franchisee responsible for reimbursement, plus a penalty of $500 per month until the required certificate is received. The franchisee is responsible for maintaining adequate insurance coverage at all times and should consult with advisors to determine if additional insurance is necessary beyond the minimum requirements.