What is the minimum professional liability insurance coverage required for a Brightstar Care franchise with annual revenue exceeding $10,000,000?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
revenue increases:
- (a) Professional liability insurance on an occurrence basis under the following annual revenue tiers with a separate limit not less than:
- (1) $1,000,000 per occurrence/$3,000,000 aggregate per policy year if your annual revenue is between $0 $5,000,000;
- (2) $3,000,000 per occurrence/$5,000,000 aggregate per policy year if your annual revenue is between $5,000,001 $10,000,000; and
- (3) $5,000,000 per occurrence/$10,000,000 aggregate per policy year if your annual revenue is above $10,000,000.
If you purchase this coverage on a claims-made policy form, you must purchase a minimum 3-year extended reporting endorsement (aka "tail") upon sale or closur
Source: Item 6 — OTHER FEES (FDD pages 17–34)
What This Means (2025 FDD)
According to Brightstar Care's 2025 Franchise Disclosure Document, a franchisee with annual revenue above $10,000,000 must maintain professional liability insurance coverage of at least $5,000,000 per occurrence and $10,000,000 in aggregate per policy year. This coverage must be on an occurrence basis. If the franchisee opts for a claims-made policy, they are required to purchase a minimum 3-year extended reporting endorsement, also known as a "tail," upon the sale or closure of their Brightstar Care business.
Brightstar Care mandates that the insurance policy names BrightStar Group Holdings, Inc., its subsidiaries, officers, directors, employees, and any other designated entities as additional insureds. This requirement ensures that the parent company and its affiliates are protected under the franchisee's liability coverage. The FDD emphasizes that franchisees should assess whether the minimum coverage is sufficient for their specific business needs and consider obtaining broader coverage, higher limits, or additional types of insurance through approved agencies.
The franchisor retains the right to periodically revise these minimum insurance requirements in the Operations Manual to account for inflation, industry standards, or claims experience. Furthermore, Brightstar Care specifies that all insurance companies providing coverage must have an A.M. Best's rating of "A-/Excellent" or better, or receive written approval from Brightstar Care before coverage is placed. This ensures that franchisees work with reputable and financially stable insurance providers.
Prospective Brightstar Care franchisees should carefully review these insurance requirements and factor the costs of obtaining and maintaining the necessary coverage into their financial projections. It is also important to consult with an insurance professional to determine the appropriate level of coverage for their specific circumstances, considering the potential risks and liabilities associated with operating a Brightstar Care franchise.