When must a Baya Bar franchisee obtain the required insurance coverage for the Shop?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
h the Americans with Disabilities Act.
Insurance
When you sign the lease for the Shop premises or 90 days after you sign the Franchise Agreement, whichever occurs first, you must obtain the insurance coverage for the Shop that is required by the terms of your lease and applicable law, and that we specify in the Manual or otherwise in writing. Your insurance coverage must be maintained during the term of the Franchise Agreement and must be obtained from a responsible, duly licensed carrier or carriers acceptable to us and having a rating of at least "A-VII" with A.M. Best Company. All insurance must be on an "occurrence" basis. Currently you must maintain the following insurance: (1) "Special" causes of loss coverage forms, including fire and extended coverage, crime, vandalism, and malicious mischief, on all property of the Franchised Business, for full repair and replacement value (subject to a reasonable deductible); (2) Business interruption insurance covering at least 12 months of income; (3) Commercial General Liability insurance, including products liability coverage, and broad form commercial liability coverage, written on an "occurrence" policy form in an amount of not less than $1,000,000 single limit per occurrence and $2,000,000 aggregate limit; (4) Business Automobile Liability insurance including owned, leased, non-owned and hired automobiles coverage in an amount of not less than $1,000,000; (5) Workers Compensation coverage as required by state law; and (6) any insurance required by the terms of your lease, required by law or that we may require in the future.
All insurance policies, except for workers' compensation, must name us, our affiliates and the officers, directors, shareholders, partners, agents, representatives, independent contractors, servants and employees of each of them, as additional named insureds. All insurance policies must include a waiver of subrogation in favor of us and our affiliates, must be primary and non-contributing with any insurance carried by us or our affiliates, and must stipulate that we receive no less than 30 days' prior written notice
of a material alteration to or cancellation of the policies. You must provide us with a certificate of insurance showing that you have obtained the required policies when you sign the lease for the Shop premises or 90 days after you sign the Franchise Agreement, whichever occurs first, and within ten days each policy's renewal. We have the right to require that you obtain from your insurance company a report of claims made and reserves set against your insurance. We have the right to change our insurance requirements during the term of your Franchise Agreement, including the types of coverage and the amounts of coverage, and you must comply with those changes. If you do not obtain any insurance as required, we have the right (but not the obligation) to purchase insurance on your behalf and you must reimburse our costs related to this purchase plus a 10% administrative fee.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 20–24)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, a franchisee must obtain the required insurance coverage for their shop when they sign the lease for the shop premises or 90 days after signing the Franchise Agreement, whichever comes first. The insurance coverage must adhere to the terms of the lease, applicable law, and the specifications outlined in the manual or in writing by Baya Bar. This insurance must be maintained throughout the term of the Franchise Agreement.
The required insurance must be obtained from a responsible, duly licensed carrier with a rating of at least "A-VII" from A.M. Best Company, and all insurance must be on an "occurrence" basis. The franchisee must maintain specific insurance coverages, including "Special" causes of loss coverage, business interruption insurance covering at least 12 months of income, Commercial General Liability insurance with specified limits, Business Automobile Liability insurance, and Workers Compensation coverage as required by state law.
All insurance policies, except for workers' compensation, must name Baya Bar, its affiliates, and their respective personnel as additional named insureds. Additionally, these policies must include a waiver of subrogation in favor of Baya Bar and its affiliates, be primary and non-contributing with any insurance carried by them, and stipulate that Baya Bar receives at least 30 days' prior written notice of any material alteration or cancellation of the policies. Franchisees must provide Baya Bar with a certificate of insurance when they sign the lease or 90 days after signing the Franchise Agreement, and within ten days of each policy's renewal. Baya Bar has the right to change insurance requirements during the term of the Franchise Agreement, and franchisees must comply with these changes. Failure to obtain the required insurance allows Baya Bar to purchase insurance on the franchisee's behalf, with the franchisee responsible for reimbursing the costs plus a 10% administrative fee.