How often must a Budget licensee provide a current certificate of insurance to Budget?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
Licensee will maintain such insurance, in such minimum amounts, and with such carriers as approved by Budget in its sole discretion or, as are prescribed in the Standards and in this Paragraph 9.4.
Licensee will annually provide a current certificate of insurance to Budget naming Budget and its affiliates as additional insureds as prescribed by Budget in the Standards, and the insurer must waive any subrogation rights it may have against Budget.
Budget may periodically increase the amounts of insurance carried by Licensee and require different or additional kinds of insurance to reflect inflation, changes in standards of liability, higher damages, Licensees specific claims history or other relevant circumstances.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, a licensee must provide a current certificate of insurance to Budget on an annual basis. This certificate must name Budget and its affiliates as additional insureds, as prescribed by Budget in its Standards. Furthermore, the insurer providing the certificate must waive any subrogation rights it may have against Budget.
This requirement ensures that Budget is protected against potential liabilities arising from the licensee's operations. By being named as an additional insured, Budget can directly benefit from the licensee's insurance coverage in the event of a claim. The waiver of subrogation rights further protects Budget by preventing the insurer from pursuing claims against them to recover any payments made under the policy.
Budget also retains the right to periodically increase the required insurance amounts or mandate different or additional types of insurance. This flexibility allows Budget to adapt to changing circumstances, such as inflation, evolving liability standards, increased damages, the licensee's specific claims history, or other relevant factors. This ensures that the insurance coverage remains adequate over time to protect both the licensee and Budget.
It is important for prospective Budget franchisees to understand these insurance requirements and factor the costs of maintaining the necessary coverage into their business plan. They should also be prepared for the possibility of increases in insurance requirements over time. Licensees should consult with insurance professionals to ensure they obtain the appropriate coverage that meets Budget's standards and adequately protects their business.