What is the minimum coverage amount for Business Automobile Liability insurance for a Baya Bar franchise?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
ompany. 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 leas
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, franchisees are required to maintain Business Automobile Liability insurance with a minimum coverage of $1,000,000. This insurance must cover owned, leased, non-owned, and hired automobiles.
This requirement ensures that Baya Bar franchisees have adequate financial protection in the event of an automobile accident involving their business. The $1,000,000 minimum coverage is a standard amount in the franchise industry, reflecting the potential for significant liability in such incidents. Franchisees must secure this coverage when they sign the lease for their shop or 90 days after signing the Franchise Agreement, whichever comes first, and maintain it throughout the term of the agreement.
It is important to note that Baya Bar also requires franchisees to obtain other types of insurance, including commercial general liability insurance, workers' compensation, and property insurance. Additionally, Baya Bar has the right to change its insurance requirements during the term of the Franchise Agreement, including the types and amounts of coverage, and franchisees must comply with these changes. Failure to maintain the required insurance coverage allows Baya Bar to purchase insurance on the franchisee's behalf, with the franchisee responsible for reimbursing the costs plus a 10% administrative fee.