What are the insurance policy requirements regarding primary coverage for a Bombs Away franchise?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
pecific Obligations
The following are our current specific obligations for purchases and leases:
- A. Insurance. You must obtain insurance as described in the Franchise Agreement and in our Manual, which includes (i) Commercial General Liability insurance, including products liability coverage, and broad form commercial liability coverage, written on an "occurrence" policy form in an amount of not less than $1,000,000 single limit per occurrence and $2,000,000 aggregate limit, (ii) Business Automobile Liability insurance including owned, leased, non-owned and hired automobiles coverage in an amount of not less than $1,000,000, and (iii) Workers Compensation coverage as required by state law. Your policies (other than Workers Compensation) must list us and our affiliates as an additional insured, must include a waiver of subrogation in favor of us and our affiliates, must be primary and non-contributing with any insurance carried by us or our affiliates, and must stipulate that we receive 30 days' prior written not
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 15–17)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, franchisees must secure specific insurance coverage, and these policies must be primary and non-contributing with any insurance carried by Bombs Away or its affiliates. This means that in the event of a claim, the franchisee's insurance policy will be the first one used to cover the costs, before any insurance held by Bombs Away is utilized.
The required insurance includes Commercial General Liability insurance with products liability coverage, written on an "occurrence" policy form, with a minimum of $1,000,000 single limit per occurrence and $2,000,000 aggregate limit. Franchisees also need Business Automobile Liability insurance covering owned, leased, non-owned, and hired automobiles with a limit of not less than $1,000,000. Additionally, Workers Compensation coverage must be obtained as mandated by state law.
Bombs Away requires that the insurance policies (excluding Workers Compensation) list Bombs Away and its affiliates as additional insured parties. The policies must also include a waiver of subrogation in favor of Bombs Away and its affiliates. Furthermore, Bombs Away must receive 30 days' prior written notice if any of these policies are canceled. These stipulations protect Bombs Away from potential liabilities and ensure they are informed of any changes to the franchisee's insurance coverage.