Regarding insurance policies, must Bombs Away Franchising's insurance coverage be primary and non-contributing with any insurance carried by the Bombs Away franchisee or its affiliates?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
- (b) Franchisee's policies (other than Workers Compensation) must (1) list Bombs Away Franchising and its affiliates as an additional insured, (2) include a waiver of subrogation in favor of Bombs Away Franchising and its affiliates, (3) be primary and non-contributing with any insurance carried by Bombs Away Franchising or its affiliates, and (4) stipulate that Bombs Away Franchising shall receive 30 days' prior written notice of cancellation.
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, franchisees are required to maintain specific insurance policies, and their policies (excluding Workers Compensation) must adhere to certain conditions regarding Bombs Away Franchising's coverage.
Specifically, the franchisee's insurance policies must list Bombs Away Franchising and its affiliates as additional insured parties. Furthermore, these policies must include a waiver of subrogation in favor of Bombs Away Franchising and its affiliates. This means that the franchisee's insurance company cannot attempt to recover any payments made to Bombs Away Franchising from the franchisee.
Most importantly, the franchisee's insurance coverage must be primary and non-contributing with any insurance carried by Bombs Away Franchising or its affiliates. This means that the franchisee's insurance policy is the first one that must pay out in the event of a claim, and Bombs Away Franchising's insurance will only be used if the franchisee's coverage is exhausted. Finally, the franchisee's insurance policy must stipulate that Bombs Away Franchising will receive 30 days' prior written notice of cancellation, ensuring Bombs Away Franchising is aware of any changes to the franchisee's insurance coverage.