Who bears the expense of maintaining insurance coverage for the Body20 Studio?
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,
except for the employment practices liability insurance coverage, which is on a "claims made" basis. All policies shall apply on a primary and non-contributory basis to any other insurance or self-insurance that we or our Affiliates maintain. All general liability and workers' compensation coverage must provide for waiver of subrogation in favor of us and our Affiliates. We may, upon at least 60 days' notice to you, periodically increase the amounts of coverage required and/or require different or additional insurance coverage at any time to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards or other relevant changes in circumstances. All insurance policies must name us and any Affiliates we designate as an additional insured and provide for 30 days' prior written notice to us of a policy's material modification or cancellation. You agree periodically to send us a valid certificate of insurance or duplicate insurance policy evidencing that you have maintained the required coverage and paid the applicable premiums. If you fail to obtain or maintain (or to prove that you have obtained or maintained) the insurance we specify, in addition to our other remedies, we may (but need not) obtain such insurance for you and the Studio on your behalf, in which event you shall cooperate with us, and we may charge you up to 120% of our and our affiliates' costs and epenses related to obtaining and maintaining the insurance.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, the franchisee is responsible for the expense of maintaining insurance coverage for the Body20 studio. Specifically, the franchisee must maintain insurance coverage during the term of the agreement at their sole expense. The required insurance must cover the risks and contain the exceptions and exclusions that Body20 periodically specifies in its manuals for all similarly situated studios.
All insurance carriers must be rated A or higher by A.M. Best and Company, Inc., or meet similar criteria specified by Body20. These insurance policies must be in effect by the deadlines set by Body20. The coverage must be on an "occurrence" basis, except for employment practices liability insurance, which is on a "claims made" basis. All 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 may periodically 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 factors like 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. The franchisee 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 with Body20, and Body20 may charge the franchisee 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 additional costs and potential intervention by the franchisor.