On what basis must the insurance coverage for a Body20 Studio be?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
During the Term you must maintain in force at your sole expense the insurance coverage for the Studio in the amounts, covering the risks, and containing only the exceptions and exclusions that we periodically specify in the Manuals for all similarly situated Studios.
All of your insurance carriers must be rated A or higher by A.M.
Best and Company, Inc. (or such similar criteria as we periodically specify).
These insurance policies must be in effect on or before the deadlines we specify.
All coverage must be on an "occurrence" basis,
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, the insurance coverage for a Body20 studio must be maintained during the term of the franchise agreement at the franchisee's sole expense. The coverage must be in the amounts, covering the risks, and containing only the exceptions and exclusions that Body20 periodically specifies in its manuals for all similarly situated studios.
The insurance carriers must have a rating of A or higher from A.M. Best and Company, Inc., or meet similar criteria as Body20 specifies. The insurance policies must be in effect by the deadlines set by Body20. All coverage must be on an "occurrence" basis, except for employment practices liability insurance, which can be on a "claims made" basis. The policies should apply on a primary and non-contributory basis to any other insurance or self-insurance that Body20 or its affiliates maintain. General liability and workers' compensation coverage must provide for a waiver of subrogation in favor of Body20 and its affiliates.
Body20 retains the right to increase the required coverage amounts or require different or additional insurance coverage with at least 60 days' notice to the franchisee. This can be due to inflation, new risks, changes in law, higher damage awards, or other relevant changes. All insurance policies must name Body20 and any designated affiliates as additional insured parties and provide 30 days' prior written notice of any material modification or cancellation of the policy. Franchisees must periodically send Body20 a valid certificate of insurance or a duplicate policy as evidence of maintained coverage and premium payments.
If a franchisee fails to obtain or maintain the specified insurance, Body20 has the option to obtain such insurance on behalf of the franchisee and the studio. In such cases, the franchisee must cooperate, and Body20 may charge up to 120% of its and its affiliates' costs and expenses related to obtaining and maintaining the insurance. This highlights the importance of adhering to Body20's insurance requirements to avoid potential additional costs and ensure compliance with the franchise agreement.