What is the minimum limit for Commercial General Liability Insurance coverage required for an Aplus franchise for bodily injury and property damage?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
- (1) COMMERCIAL GENERAL LIABILITY INSURANCE against claims for damage to persons or property arising out of your operation of the Franchise at the Premises, including product liability, completed operations coverage and liquor liability (if applicable) with a minimum limit of at least $500,000 for bodily injury and property damage, combined single limit each occurrence. The coverage must include contractual liability covering the indemnification and hold harmless provisions of Section 2.16, subject to the Commercial General Liability Policy's standard terms and conditions.
NOTE: SUNOCO MUST BE INCLUDED AS AN ADDITIONAL INSURED AND LOSS PAYEE ON ALL INSURANCE POLICIES.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, franchisees must maintain Commercial General Liability Insurance with a minimum limit of $500,000 for bodily injury and property damage, combined single limit for each occurrence. This insurance coverage must include product liability, completed operations coverage, and liquor liability if applicable.
The coverage must also include contractual liability, which covers the indemnification and hold harmless provisions outlined in Section 2.16 of the franchise agreement, subject to the standard terms and conditions of the Commercial General Liability Policy. Additionally, Sunoco, the parent company, must be included as an additional insured on this policy and is entitled to coverage limits equal to or greater than the minimum requirements.
It is important to note that Aplus has the right to reasonably increase the minimum liability protection requirement annually to reflect inflation, changes in liability standards, future damage awards, or other relevant changes in circumstances. Franchisees must ensure that their insurance policies are written by a company licensed in the state of operation with at least an "A-" Rating Classification as indicated in A.M. Best's Key Rating Guide. Failure to maintain the required insurance coverage allows Aplus to procure the insurance and charge the premiums to the franchisee, along with a fee for expenses incurred, not exceeding $1,000.