Does Aplus require franchisees to maintain Workers' Compensation and Employer's Liability insurance?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
s. Franchisor's insurance requirements, including types of coverages and amount may change over time.
Franchisee acknowledges that the foregoing minimum insurance requirements do not constitute advice or a representation that such coverages are necessary or adequate to protect Franchisee from losses in connection with the Center. Nothing in this Agreement prevents or restricts Franchisee from acquiring and maintaining insurance with higher policy limits or lower deductibles than Franchisor requires.
15.2. Future Increases
Franchisor has the right to reasonably increase the minimum liability protection requirement annually and require different or additional insurance coverage(s) to reflect inflation, changes in standards of liability, future damage awards or other relevant changes in circumstances.
15.3. Carrier Standards
Such policies shall be written by an insurance company licensed in the state in which Franchisee operates and having at least an "A-" Rating Classification as indicated in the latest issue of A.M. Best's Key Rating Guide.
15.4. Evidence of Coverage
Franchisee's obligation to obtain and maintain the foregoing policies shall not be limited in any way by reason of any insurance which may be maintained by Franchisor, nor shall Franchisee's performance of this obligation relieve it of liability under the indemnity provisions set forth in Section 21.3. Franchisee shall provide to Franchisor proof of the endorsements along with insurance certificates and/or other proof of coverage to Franchisor requires. Upon issuance of a policy and renewal of said policy, Franchisee shall provide to Franchisor, certificates of insurance showing compliance with the foregoing requirements within fifteen (15) days of Franchisee's receipt of such certificates. Such certificates shall state that said policy or policies shall not be canceled or altered without at least thirty (30) days' prior written notice to Franchisor and shall reflect proof of payment of premiums.
15.5.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, franchisees are required to obtain and maintain various insurance policies. While the document does not explicitly state that franchisees must maintain Workers' Compensation and Employer's Liability insurance, it does state that Aplus has the right to reasonably increase the minimum liability protection requirement annually and require different or additional insurance coverage(s) to reflect inflation, changes in standards of liability, future damage awards or other relevant changes in circumstances.
Franchisees must ensure that their insurance policies are written by an insurance company licensed in the state in which they operate and have at least an "A-" Rating Classification as indicated in the latest issue of A.M. Best's Key Rating Guide. Franchisees must provide Aplus with proof of endorsements, insurance certificates, or other proof of coverage that Aplus requires within fifteen (15) days of receiving such certificates, and these certificates must state that the policies will not be canceled or altered without at least thirty (30) days' prior written notice to Aplus and reflect proof of payment of premiums.
If a franchisee fails to procure and maintain the required insurance coverage, Aplus has the right, but not the obligation, to immediately procure such insurance coverage and charge the premiums to the franchisee. In addition to the premiums, Aplus may charge a reasonable fee for expenses incurred in connection with procuring the insurance, not to exceed $1,000, which is payable immediately upon notice. Prospective franchisees should clarify with Aplus the specific types and amounts of insurance coverage they will be required to maintain, including whether Workers' Compensation and Employer's Liability insurance are mandatory.