Must an Amerispec Inspection Services franchisee be adequately insured before offering services to the public?

may revise the list of approved suppliers from time to time in our sole discretion.

Insurance. You must insure your Franchised Business with coverage, types, and amounts that we specify in the Operations Manual or otherwise in writing. You cannot begin offering services to the public unless you are adequately insured. Our present insurance requirements are:

• (a) Employers' liability with a minimum limit of $500,000 in workers' compensation and other statutory required programs;
• (b) Commercial general liability insurance covering the operation of your Franchised Business with a limit of at least $1,000,000;
• (c) Business automobile insurance for hired, owned and non-owned or any auto with a minimum limit of liability of $1,000,000 for both bodily injury and property damage;
• (d) Errors and omissions with a minimum limit of liability of $1,000,000; and
• (e) Additional insured by schedule, including Franchisor, others named, and per contractual requirement.

If you offer commercial inspection services, we require you to carry Errors & Omission insurance that covers commercial inspections. Most E&O master insurance policies cover buildings not exceeding four stories in height and 50,000 square feet and 20 acres in size. Larger buildings may require additional coverage; check with your E&O insurance carrier prior to inspecting such larger buildings.

For all insurance policies, you must list us and our affiliates as an additional insured. We reserve the right to modify these insurance requirements periodically and you must meet any new requirements.

All insurance policies procured and maintained by you must (i) be written by an insurance company satisfactory to us, (ii) name us, our affiliates, and our officers, directors, employees, agents, and partners, as an additional insured (except Workers' compensation policy), (iii) contain endorsements by the insurance companies waiving all rights of subrogation against us for workers' compensation insurance, commercial general liability insurance,

and business automobile liability insurance, and (iv) stipulate that we will receive copies of all notices of cancellation, non- renewal or coverage reduction or elimination at least 10 days prior to such event.

If you fail or refuse to maintain any required insurance coverage required or fail to furnish satisfactory evidence of coverage, we may, at our option and in addition to any other rights and remedies we have hereunder, obtain such insurance coverage on your behalf, and any cost

Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 20–22)