What are the requirements for the Business Automobile Liability insurance coverage for owned, leased, non-owned and hired automobiles 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 maintain Business Automobile Liability insurance coverage for owned, leased, non-owned, and hired automobiles. The minimum coverage amount required is $1,000,000.
In addition to the Business Automobile Liability insurance, Bombs Away franchisees are also required to have Commercial General Liability insurance with a minimum of $1,000,000 single limit per occurrence and $2,000,000 aggregate limit, as well as Workers Compensation coverage as mandated by state law. These policies, excluding Workers Compensation, must list Bombs Away and its affiliates as additional insured parties and include a waiver of subrogation in favor of Bombs Away and its affiliates.
The insurance policies must be primary and non-contributing with any insurance carried by Bombs Away or its affiliates. Furthermore, the insurance provider must stipulate that Bombs Away receives 30 days' prior written notice of any policy cancellation. This ensures Bombs Away is informed of any changes to the franchisee's insurance coverage, allowing them to take necessary actions to protect their interests and brand.
These insurance requirements are typical in franchising, as they protect both the franchisee and the franchisor from potential liabilities. Franchisees should factor in the cost of these insurance policies when evaluating the overall investment required to start and operate a Bombs Away franchise.