What are the specific requirements for a Boulder Designs franchisee to maintain insurance coverage (Item 9), and how do these requirements relate to the franchisor's risk management policies?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
requirements.
- a) "all risk" property insurance, including business interruption insurance, customarily obtained by similar businesses in your general area to cover, at a minimum, all assets including inventory, furniture, fixtures, equipment, supplies and other property used in the operation of your Boulder Designs Business; and
- b) General commercial liability insurance in an amount of not less than $1,000,000 per occurrence with a $2,000,000 general aggregate; and
- c) Comprehensive general liability insurance, including products and contractual, in an amount of not less than $30,000 per occurrences with a $30,000 general aggregate; and
- d) Workers' compensation insurance for statutory limits and employer's liability insurance in an amount not less than $500,000; and
- e) Vehicle replacement insurance to cover the cost of acquiring a replacement vehicle, typically around $30,000; and
- f) Automobile liability coverage, including coverage of owned, non-owned and hired vehicles with coverage in amounts not less than $1,000,000 combined single limit; and
- g) Franchisor reserves the right to require you to obtain insurance policies to protect against cybersecurity threats, and accordingly, to require that Franchisor is named as additional insured on these cybersecurity insurance policies.
We must be named as additional insured on all of these policies, except for worker's compensation insurance, and provide us with the additional insured endorsement for each policy. All insurance policies must include a waiver of subrogation in favor of us and our affiliates, and each company's officers, directors, shareholders, partners, members, agents, representatives, independent contractors, servants, and employees, and must include a 30-day notice of cancellation directed to both you and to us or the person we designate.
These are our minimum requirements. We have the right to establish and modify the minimum coverages required and require different or additional kinds of insurance to reflect inflation, changes in standards of liability, higher damage awards, and other relevant changes in circumstances. You should consult with your own insurance advisor to determine whether they are appropriate and sufficient for your business and to protect your assets. Your landlord and lease may require more coverage, additional or different type
What This Means (2025 FDD)
According to Boulder Designs's 2025 Franchise Disclosure Document, franchisees must obtain and maintain several types of insurance coverage. These include "all risk" property insurance, general commercial liability insurance of at least $1,000,000 per occurrence with a $2,000,000 general aggregate, comprehensive general liability insurance of at least $30,000 per occurrence and aggregate, workers' compensation insurance for statutory limits with employer's liability insurance of at least $500,000, vehicle replacement insurance around $30,000, and automobile liability coverage of at least $1,000,000 combined single limit. Boulder Designs also reserves the right to require franchisees to obtain cybersecurity insurance and to be named as an additional insured on those policies. These insurance requirements are designed to protect both the franchisee and Boulder Designs from potential financial losses due to property damage, liability claims, and other unforeseen events. The franchisee must procure these policies within 30 days of the Effective Date.
Boulder Designs requires that it be named as an additional insured on all policies except worker's compensation, and that the policies include a waiver of subrogation in favor of Boulder Designs and its affiliates. Franchisees must provide Boulder Designs with the additional insured endorsement for each policy. All insurance policies must include a 30-day notice of cancellation directed to both the franchisee and Boulder Designs. Franchisees must provide certificates of coverage to Boulder Designs at least annually. If a franchisee fails to provide proof of insurance, Boulder Designs has the right to purchase the insurance on behalf of the franchisee, and the franchisee must immediately reimburse Boulder Designs for the expenses and premiums paid.
Boulder Designs retains the right to modify the minimum insurance coverages required to reflect inflation, changes in liability standards, higher damage awards, and other relevant changes. This allows Boulder Designs to adapt its risk management policies to changing circumstances and ensure adequate protection for the franchise system. The FDD advises franchisees to consult with their own insurance advisor to determine if the minimum requirements are appropriate and sufficient for their specific business needs and to protect their assets. Additionally, a franchisee's landlord and lease may require more coverage, additional, or different types of coverage.