What are the insurance requirements for substitute vehicles used in the Aunt Millies Bakeries business?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
t are as follows:
- (i) Comprehensive general liability insurance, including product liability (to include broad form contractual liability coverage) with $2,000,000 combined single limits;
- (ii) Automobile liability insurance with minimum limits of $2,000,000 combined single limits, on all vehicle(s) used in Distributor's business; and
- (iii) Collision and Comprehensive damage coverage with a deductible no greater than $500.00 on all vehicle(s) used in Distributor's business.
In the event a substitute vehicle is used by Distributor coverage will automatically apply to the substitute vehicle. In addition, the Distributor must carry policies or riders providing cargo insurance in an amount of not less than $2,000, and Inland Marine coverage of not less than $5,000. In the event equipment to be insured exceeds the value of $5,000.00, additional Inland Marine coverage must be purchased. The insurance contemplated shall be in a form acceptable to Secured Party, shall name Secured Party as an additi
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries' 2025 Franchise Disclosure Document, if a distributor uses a substitute vehicle, the insurance coverage will automatically extend to that vehicle. In addition to this automatic coverage, the distributor is required to maintain cargo insurance of at least $2,000 and Inland Marine coverage of no less than $5,000.
If the equipment to be insured exceeds $5,000 in value, the distributor must purchase additional Inland Marine coverage to adequately protect the assets. The insurance policy must be acceptable in form to the Secured Party, which should be named as an additional insured and loss payee on any collision or comprehensive damage policy covering physical assets subject to a lien.
Aunt Millies Bakeries requires that the Secured Party receive 30 days' advance written notice of any material changes or cancellation of the insurance coverage. Upon request, the distributor must provide a certificate confirming that the required coverages are in effect and are primary over any other applicable insurance policies. These stipulations ensure continuous and adequate protection of the assets and interests of both the distributor and Aunt Millies Bakeries.