What rating must the insurance companies providing coverage to an Amerispec Inspection Services franchisee maintain?
Amerispec_Inspection_Services Franchise · 2025 FDDAnswer from 2025 FDD Document
Such coverage must be obtained from insurance companies maintaining an A rating by Alfred M. Best & Company, Inc., or such other insurance companies approved in advance by the Company. All errors and omissions, and public liability and business automobile liability insurance policies, shall name the Company as an additional insured and shall provide that the Company receive 10 days' prior written notice of termination, expiration, reduction or cancellation of any such policy. The Franchisee shall submit to the Company, annually within 30 days of the effective date of the policy, a copy of the certificate of insurance or other evidence of the renewal or extension of each such insurance policy as requested by the Company.
Source: Item 23 — Receipts (FDD pages 47–172)
What This Means (2025 FDD)
According to the 2025 FDD, Amerispec Inspection Services requires its franchisees to secure insurance coverage from companies that have a minimum rating of "A" from Alfred M. Best & Company, Inc., or from other insurance companies that Amerispec Inspection Services has approved in advance. This requirement ensures that the franchisee has reliable insurance coverage to protect both the franchisee and Amerispec Inspection Services from potential liabilities.
In addition to the minimum rating requirement, the FDD specifies that Amerispec Inspection Services must be named as an additional insured on all errors and omissions, public liability, and business automobile liability insurance policies. This provision offers Amerispec Inspection Services an added layer of protection against claims related to the franchisee's operations. Furthermore, the insurance policies must stipulate that Amerispec Inspection Services receives 10 days' prior written notice if there is any termination, expiration, reduction, or cancellation of the policy.
To ensure compliance, Amerispec Inspection Services requires franchisees to submit a copy of the certificate of insurance or other evidence of renewal or extension of each insurance policy annually, within 30 days of the policy's effective date. This allows Amerispec Inspection Services to verify that franchisees maintain the required coverage. If a franchisee fails to maintain the required insurance coverage or provide satisfactory evidence of it, Amerispec Inspection Services has the option to obtain the necessary insurance on behalf of the franchisee, with the franchisee responsible for paying the premiums upon demand.