What is the coverage amount for employee dishonesty under the Anago franchise agreement?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
ault or otherwise) of this Agreement, Subfranchisor shall deliver all Client lists and Client Accounts to Franchisor, including any and all documentation relating thereto and Subfranchisor shall have no further rights therein.
Section 3.7 - Insurance
- (a) Subfranchisor will procure and maintain in full force and effect during the Term, at Subfranchisor's sole expense, an insurance policy or policies, as required by Franchisor, including coverage protecting Subfranchisor and Franchisor, and their officers, directors, partners and employees, against any loss, liability, personal injury, death, or property damage or expense arising from Subfranchisor's obligations under this Agreement. The Subfranchisor is required to obtain insurance coverage through the Anago National Insurance program during the entire Term. All liability policies will name Franchisor as the additional insured and will provide that Franchisor will receive notice of Subfranchisor's default in payment of any premium and 30 days' prior written notice of termination, cancellation, expiration or alteration to provide less coverage. The insurance afforded by any liability policy will not be limited in any way by reason of any insurance maintained by Franchisor. Subfranchisor is responsible for payment of all deductibles, should a claim arise.
- (b) The policy or policies will be written by a licensed insurance company and will include, at a minimum, commercial general casualty insurance and general liability insurance, including products liability, property damage, owned and non-owned motor vehicle coverage, and personal injury coverage with a combined single limit of $1,000,000, with an umbrella policy of $2,0
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, subfranchisors are required to obtain an "Errors and Omissions" policy with $1,000,000 coverage. Additionally, they must maintain workers' compensation insurance for accident or disease in an amount not less than $500,000 per employee. This insurance coverage is part of the broader insurance requirements that Anago mandates to protect both the subfranchisor and Anago itself from potential liabilities.
The "Errors and Omissions" policy is crucial for covering potential liabilities arising from professional negligence or mistakes made by the subfranchisor or their employees. The $1,000,000 coverage limit provides a financial safety net in case of significant claims. Similarly, the workers' compensation insurance ensures that employees are covered for work-related injuries or illnesses, with a minimum coverage of $500,000 per employee.
It is important to note that Anago requires subfranchisors to obtain insurance coverage through the Anago National Insurance program. This program ensures that all subfranchisors have adequate coverage and that Anago is named as an additional insured on all liability policies. Subfranchisors are responsible for paying the actual cost to maintain the insurance policy, and Anago reserves the right to change, modify, or cancel the plans, with future changes in premiums and coverages to be set forth in the manuals or in writing.
Prospective subfranchisors should carefully review the insurance requirements and costs associated with the Anago National Insurance program to ensure they can meet these obligations. They should also be aware that Anago may periodically adjust the amounts of coverage required and may require different or additional kinds of insurance at any time to reflect changes in circumstances.