What are the specific obligations of a Bombs Away franchisee regarding the maintenance of insurance coverage, considering the general obligations in Item 9 and the potential liabilities associated with the business?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
ranchising requires, including any national or regional brand conventions. Franchisee shall not permit the Principal Executive to fail to attend more than three consecutive required meetings.
7.15 Insurance.
- (a) Franchisee shall obtain and maintain insurance policies in the types and amounts as specified by Bombs Away Franchising in the Manual. If not specified in the Manual, Franchisee shall maintain at least the following insurance coverage:
- (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.
- (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
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, franchisees are required to obtain and maintain specific insurance policies. The types and amounts of coverage are detailed in the Bombs Away manual. If not specified in the manual, franchisees must maintain certain minimum coverage levels. These include Commercial General Liability insurance with a $1,000,000 single limit per occurrence and a $2,000,000 aggregate limit, Business Automobile Liability insurance of not less than $1,000,000, and Workers Compensation coverage as mandated by state law.
Bombs Away franchisees' insurance policies, excluding Workers Compensation, must adhere to specific requirements to protect Bombs Away Franchising and its affiliates. These stipulations include listing Bombs Away Franchising and its affiliates as additional insured parties, incorporating a waiver of subrogation in favor of Bombs Away Franchising and its affiliates, ensuring the franchisee's coverage is primary and non-contributing with any insurance held by Bombs Away Franchising or its affiliates, and providing Bombs Away Franchising with 30 days' prior written notice of any policy cancellation.
These insurance requirements are typical in franchising, designed to protect both the franchisee and franchisor from potential liabilities. Franchisees should carefully review the insurance section of the Bombs Away manual and consult with an insurance professional to ensure they obtain adequate coverage that meets all requirements. Failure to maintain the required insurance coverage could result in a breach of the franchise agreement, potentially leading to termination.