What is the minimum amount of comprehensive general liability insurance coverage required for a Beauty Bungalows franchise?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
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Insurance
You must, at all times, maintain insurance as follows:
- A. If you have employees, workers' compensation insurance in amounts prescribed by law in your territory but not less than $500,000 in coverage;
- B. Fire and lightning, extended coverage, theft, vandalism and malicious mischief, flood (if the Beauty Bungalows Franchise is in a Designated Flood Hazard Area), and sprinkler leakage insurance on the Beauty Bungalows Franchise and all fixtures, equipment, supplies and other property used in the operation of the Beauty Bungalows Franchise, for not less than 100% of the replacement value of the same, except that an appropriate deductible clause will be permitted;
- C. Comprehensive general liability insurance and product liability insurance coverage in such amounts and upon such terms as may from time to time be customary for a salon studio rental business located in your Protected Territory, but not less than $1,000,000, insuring both you and Beauty Bungalows against all claims, suits, obligations, liabilities and damage, including attorneys' fees, based upon or arising out of actual or alleged personal injuries or property damage relating to the use or condition of the Beauty Bungalows Franchise.
- D.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–22)
What This Means (2025 FDD)
According to Beauty Bungalows's 2025 Franchise Disclosure Document, franchisees must maintain comprehensive general liability and product liability insurance. The coverage must be in amounts customary for a salon studio rental business in the franchisee's protected territory, but no less than $1,000,000. This insurance protects both the franchisee and Beauty Bungalows against claims, suits, obligations, liabilities, and damages, including attorney's fees, arising from personal injuries or property damage related to the use or condition of the Beauty Bungalows franchise.
In addition to comprehensive general liability insurance, Beauty Bungalows franchisees must also maintain professional liability insurance of no less than $1,000,000 per occurrence. This protects against professional-related claims. If a renter's operations within the Beauty Bungalows franchise are excluded from the professional liability policy, the franchisee is responsible for ensuring that the excluded operation is covered under a separate policy.
It is important to note that if a Beauty Bungalows franchisee fails to maintain the required insurance coverage, Beauty Bungalows has the right to obtain the insurance on the franchisee's behalf. In such cases, the franchisee will be responsible for the cost of the insurance premium, plus an additional 20% of the premium amount as an administrative fee. This highlights the importance of securing and maintaining the required insurance coverage to avoid additional costs and potential disruptions to the business.