When must a Baya Bar franchisee obtain comprehensive automobile liability insurance?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
n insurance for a minimum of twelve (12) months, in an amount necessary to satisfy Franchisee's obligations under this Agreement and the lease for the Franchised Business location.
- 15.1.5 Automobile Insurance. Prior to operation of any vehicle on behalf of the Franchised Business, Franchisee must obtain comprehensive automobile liability insurance in the amount of at least a combined single limit for bodily injury and property damage of One Million Dollars ($1,000,000).
- 15.2 Evidence of Insurance. Franchisee shall deliver to, and maintain at all times with Franchisor, current Certificates of Insurance evidencing the existence and continuation of the required coverages. In addition, if requested by Franchisor, Franchisee shall deliver to Franchisor a copy of the insurance policy or policies required hereunder.
- 15.3 Failure to Procure. If, for any reason, Franchisee should fail to procure or maintain the insurance required by this Agreement as revised from time to time for all franchisees by the Manual or otherwise in writing, Franchisor shall have the right and authority (without, however, any obligation) to immediately procure such insurance and to charge Franchisee for the cost thereof together with a reasonable fee for Franchisor's expenses in so acting, including all attorneys' fees. Franchisee shall pay Franchisor immediately upon notice by Franchisor to Franchisee that Franchisor has undertaken such action and the cost thereof.
- 15.4 Increase in Coverage**.** The levels and types of insurance stated herein are minimum requirements. Franchisor reserves the right to raise the required minimum requirements for any type of insurance or add additional types of insurance requirements as Franchisor deems r
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, a franchisee must obtain comprehensive automobile liability insurance prior to operating any vehicle on behalf of the franchised business. The minimum coverage required is a combined single limit of $1,000,000 for bodily injury and property damage.
This requirement ensures that Baya Bar franchisees have adequate financial protection in case of accidents involving vehicles used for the business. It covers potential liabilities for bodily injury and property damage caused to third parties. Franchisees must provide and maintain current Certificates of Insurance to Baya Bar as evidence of the required coverage.
Baya Bar also has the right to increase the minimum insurance requirements or add additional types of insurance as deemed necessary. Franchisees must submit proof of coverage meeting any new requirements within 30 days of notification. If a franchisee fails to maintain the required insurance, Baya Bar has the right, but not the obligation, to procure the insurance and charge the franchisee for the cost, including a reasonable fee and attorney's fees. This protects both the franchisee and Baya Bar from potential financial losses due to accidents or other liabilities.
In addition to automobile liability insurance, Baya Bar requires franchisees to maintain other insurance policies, including commercial general liability insurance, worker's compensation coverage, property insurance, and business interruption insurance. These requirements are typical in franchising to protect the brand and the franchisee from various risks associated with operating a business.