What A.M. Best rating must the insurance carriers have for Big Apple Bagels franchisees?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
e, muffins, sandwiches, and/or coffee, as well as any other items or products that Franchisee is authorized to sell subsequent to the date of this Agreement, to the public through retail or wholesale channels of distribution.
g. Insurance.
- i. During the term of the Franchise, Franchisee shall maintain in force, under policies of insurance issued by carriers duly admitted in the Store's state, with an A.M. Best rating not less than A-, and acceptable to Franchisor, comprehensive general liability and property damage insurance against claims for bodily and personal injury, death and property damage caused by or occurring in conjunction with the operation of the BAGELS Store, or otherwise in conjunction with the conduct of business by Franchisee pursuant to the Franchise Agreement, under one or more policies of insurance containing coverage for: Workers Compensation including Employers Liability in the limit of no less than $500,000; Comprehensive General Liability of no less than $1,000,000 per occurrence with a General Aggregate of no less than $2,000,000.00; Products Liability of $2,000,000; Employment Practices Liability of no less than $500,000, Cyber Liability of no less than $1,000,000; Property Insurance in the amount of the replacement cost for stock, inventory, equ
Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, franchisees must maintain insurance policies from carriers with an A.M. Best rating of A- or higher. The insurance carriers must also be duly admitted in the store's state and acceptable to Big Apple Bagels.
This requirement ensures that the franchisee has adequate coverage from a reputable and financially stable insurance provider. A lower A.M. Best rating might indicate a higher risk of the insurance company being unable to meet its financial obligations, which could leave the franchisee exposed to uncovered losses.
Big Apple Bagels also stipulates the specific types and minimum coverage amounts franchisees must carry, including workers' compensation, comprehensive general liability, products liability, and cyber liability. The franchisor retains the right to increase coverage amounts or require different types of insurance to reflect changes in risk exposure, inflation, or legal standards.