What rating must the insurance companies providing coverage for a Big O Tires location have?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
All insurance coverages will be underwritten by a company acceptable to Big O, with a Best's Rating of no less than "A-" or a financial statement of the insurer approved by Big O. If Franchisee fails to purchase required insurance conforming to the standards prescribed by Big O, Big O may obtain such insurance for Franchisee, and Franchisee shall pay Big O the cost of such insurance plus a ten percent (10%) administrative surcharge. If Big O deems it appropriate, Franchisee shall, upon Big O's request, provide to Big O a true, complete certified copy of all, or a part of the Franchisee's insurance policies within 10 days of receiving such request. The Franchisee shall provide to Big O renewal certificates of insurance, or certified insurance binders, for all required coverages no fewer than 10 days before the indicated anniversary date(s) of such insurance coverages.
Source: Item 23 — RECEIPTS (FDD pages 102–535)
What This Means (2025 FDD)
According to Big O Tires' 2025 Franchise Disclosure Document, franchisees must ensure that all insurance coverages are underwritten by a company acceptable to Big O Tires. The insurance company must have a Best's Rating of no less than "A-" or provide a financial statement approved by Big O.
This requirement ensures that the insurance coverage is provided by financially stable and reputable companies. This protects both the franchisee and Big O Tires from potential losses due to underfunded or unreliable insurance providers.
If a franchisee fails to secure insurance that meets Big O Tires' standards, Big O Tires has the right to obtain the necessary insurance on behalf of the franchisee. In this case, the franchisee is responsible for reimbursing Big O Tires for the cost of the insurance, in addition to a 10% administrative surcharge. Franchisees must also provide renewal certificates of insurance or certified insurance binders to Big O Tires no fewer than 10 days before the anniversary date of the insurance coverages.