What A.M. Best rating must the insurance policy obtained by an Aplus franchisee have?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
the form and at such place as Franchisor prescribes, notifying the public of such independent ownership.
7.2. Insurance Obligations.
- 7.2.1. You shall maintain in full force and effect at all times during the term of this Agreement, at your expense, an insurance policy or policies meeting Franchisor's minimum insurance requirements. Each such policy shall be written by an insurance with an A.M. Best rating of not less than A-VII, shall be primary and non-contributory to any insurance carried by Franchisor or its Affiliates, and shall contain a waiver of subrogation in favor of Franchisor and its Affiliates. Franchisor has the right to increase or modify required minimum coverages at any time. Your obligation to obtain and maintain insurance is not limited in any way by reason of any insurance maintained by Franchisor, and your compliance with minimum insurance requirements will not relieve you of your indemnification obligations under Section 7.3 of this Agreement. At least 10 days prior to the time you are first required to carry insurance, and thereafter at least 30 days prior to the expiration of any policy, you shall deliver to Franchisor certificate of insurance evidencing your compliance with this Article 7. Each certificate of insurance shall expressly provide that no less than 30 days prior written notice shall be given to Franchisor in the event of material alteration to or cancellation or non-renewal of the coverages evidenced by such certificates.
- 7.2.2. If you fail to procure or maintain these minimum insurance requirements, Franchisor or its designee has the right (but is not required) to procure such insurance on your behalf. Such right shall be in addition to and not in lieu of any other rights or remedies available to Franchisor. If thi
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, franchisees must maintain an insurance policy with an A.M. Best rating of at least A-VII. This requirement ensures that the insurance provider is financially stable and capable of covering potential claims. The policy must also be primary and non-contributory to any insurance carried by Aplus or its affiliates, meaning it will be the first policy to pay out in case of a claim. Additionally, the policy must include a waiver of subrogation in favor of Aplus and its affiliates, preventing the insurance company from pursuing claims against them.
Aplus retains the right to modify the minimum coverage requirements at any time, so franchisees need to stay informed of any changes. Franchisees are obligated to provide Aplus with a certificate of insurance at least 10 days before the initial insurance requirement and 30 days before any policy expiration. This certificate must guarantee that Aplus will receive at least 30 days' notice if there are any material alterations, cancellations, or non-renewals of the insurance coverage.
If a franchisee fails to maintain the required insurance, Aplus has the option, but not the obligation, to procure insurance on the franchisee's behalf. Should this occur, the franchisee is responsible for reimbursing Aplus for the premium cost, along with an administrative fee up to $1,000. This right is in addition to any other remedies available to Aplus, highlighting the importance of franchisees maintaining compliant insurance coverage.