What are the basic insurance coverage and bond requirements that a Benjamin Franklin Plumbing franchisee must maintain?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
- 9.1. Basic Requirements. You must maintain the types and minimum amounts of insurance coverage and bonds we specify for Franchised Businesses, at your own expense. The policies must be written by carriers with an industry rating acceptable to us; must name Franchisor, our affiliates, and their respective officers, directors, shareholders, and employees as additional insureds as we direct; and must not have deductibles, exclusions or co-insurance that are unacceptable to us. Each insurance policy must contain a waiver by the insurance company of subrogation rights against Franchisor, its affiliates, and their successors and assigns. You are required to provide us with evidence of all required insurance coverage and payment of premiums at the times we require. At least thirty (30) days before each insurance policy expires, you are required to furnish a copy of renewal or replacement insurance and evidence of payment of the premium. Your obligation to obtain coverage is not limited by insurance that we maintain.
- 9.2. Changes. We have the right to increase the amounts of insurance coverage required and to require different or additional kinds of insurance. If you do not have the insurance required by this Agreement, we have the right (but no obligation) to obtain insurance on your behalf. If we do so, you agree to reimburse us for the cost of insurance, plus a reasonable fee for our services.
Source: Item 23 — RECEIPTS (FDD pages 88–312)
What This Means (2025 FDD)
According to the 2025 Benjamin Franklin Plumbing Franchise Disclosure Document, franchisees must maintain the types and minimum amounts of insurance coverage and bonds specified by the franchisor for Franchised Businesses. These policies must be written by carriers with an industry rating acceptable to the franchisor and must name the Franchisor, its affiliates, and their respective officers, directors, shareholders, and employees as additional insureds, as directed by the franchisor. The policies should not have deductibles, exclusions, or co-insurance that are unacceptable to the franchisor. Each insurance policy must contain a waiver by the insurance company of subrogation rights against the Franchisor, its affiliates, and their successors and assigns.
Benjamin Franklin Plumbing franchisees are required to provide evidence of all required insurance coverage and payment of premiums at the times required by the franchisor. At least thirty days before each insurance policy expires, franchisees must furnish a copy of renewal or replacement insurance and evidence of payment of the premium. The franchisee's obligation to obtain coverage is not limited by insurance that the franchisor maintains.
The franchisor retains the right to increase the amounts of insurance coverage required and to require different or additional kinds of insurance. If a franchisee does not have the required insurance, the franchisor has the right, but not the obligation, to obtain insurance on the franchisee's behalf, in which case the franchisee agrees to reimburse the franchisor for the cost of insurance, plus a reasonable fee for their services.
In summary, franchisees must proactively manage their insurance and bond requirements as specified by Benjamin Franklin Plumbing, ensuring continuous coverage and compliance with the franchisor's standards. Failure to maintain adequate insurance can result in the franchisor securing coverage on the franchisee's behalf, with the franchisee bearing the costs and an additional service fee.