What is the Lessee's obligation to provide proof of insurance to Bimbo Foods Bakeries Distribution?
Bimbo_Foods_Bakeries_Distribution Franchise · 2025 FDDAnswer from 2025 FDD Document
d (c) limo uses for livery. Lessee shall furnish Lessor with a certificate of insurance evidencing issuance of such insurance to Lessee in at least the minimum amount required herein, naming Lessor and such other parties designated by Lessor as additional insured thereunder for liability coverage, and as loss payee for property damage coverage. Each policy shall require insurer to give Lessor 30 days prior written notice of any material alteration in terms of policy or cancellation thereof, and shall provide that no action, misrepresentation or breach of warranty of Lessee shall invalidate the policy. If Lessee fails to provide such insurance, Lessor shall have the right, but no duty, to obtain such insurance, and Lessee shall pay Lessor all costs thereof, including all costs incurred by Lessor in obtaining such insurance together with interest at the Default Rate from the date paid by Lessor to the date paid in full by Lessee. Lessee shall not use any Vehicle if the insurance required herein is not in full force and effect with respect to such Vehicle. Upon Loss or Damage as set forth in Section 14 hereof, Lessee shall receive credit for any amounts paid to Lessor by the insurer against Lessee's obligations hereunder.
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- INDEMNITY.
Source: Item 14 — Other Accounts Payable and Accrued Liabilities (FDD pages 312–476)
What This Means (2025 FDD)
According to Bimbo Foods Bakeries Distribution's 2025 Franchise Disclosure Document, as a Lessee, you are required to furnish the Lessor with a certificate of insurance. This certificate must evidence that insurance has been issued to you, meeting at least the minimum amount required. The Lessor, and any other parties they designate, must be named as additional insureds for liability coverage and as loss payees for property damage coverage.
The insurance policy must stipulate that the insurer will provide the Lessor with a minimum of 30 days' prior written notice regarding any significant changes to the policy terms or its cancellation. Additionally, the policy should state that no action, misrepresentation, or breach of warranty by the Lessee will invalidate the insurance coverage.
If the Lessee fails to provide the required insurance, the Lessor has the right, but not the obligation, to obtain such insurance themselves. In this case, the Lessee will be responsible for paying all costs incurred by the Lessor, including interest at the default rate, from the date the Lessor paid for the insurance until the Lessee has fully reimbursed the Lessor. Furthermore, the Lessee is prohibited from using any vehicle if the required insurance is not active and in full effect. For truck/tractors over 45,000 lbs.; trailers/semi-trailers; tow trucks; and limo uses for livery, the franchisee must have $1,000,000 excess liability coverage (umbrella).
These insurance requirements protect both the Lessee and the Lessor by ensuring adequate coverage in case of accidents, damages, or liabilities. Franchisees should ensure they understand these requirements and maintain the necessary insurance coverage to avoid potential penalties or disruptions to their operations.