What A.M. Best rating must the insurance carrier have for Buff City Soap?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
r modifications to the Manuals or otherwise in writing. You shall not place a new order for any Non-Proprietary Products with a supplier after receiving written notice of changes in the Non-Proprietary Products' specifications or that our approval of the supplier has been withdrawn or revoked.
Insurance
The insurance requirements described below are for a single Makery. If you own multiple Makeries, you must meet the insurance requirements below for each Makery and "per Makery location" aggregate limits when multiple Makeries are insured under single comprehensive general liability policy (capitalized terms not defined in Exhibit I of the Franchise Agreement have the meanings set forth in the Agreement). All insurance policies must:
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- be issued by a responsible carrier or carriers that has received and maintains an A.M. Best rating of at least A-VI (or comparable ratings from a reputable insurance rating service, in the event such A.M. Best ratings are discontinued or materially altered), and otherwise approved by Franchisor;
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- contain a waiver of subrogation provision;
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- other than Workers' Compensation, name us as and additional insured on a primary basis for operations of BCS Makery. If the additional insured has other insurance applicable to a loss, it will be on an excess or contingent basis. The additional insured's insurance coverage will not be reduced by the existence of such other insurance;
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- not have any deductible, self-insured retention, self-funded retention, or any similar provision unless pr
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 29–32)
What This Means (2025 FDD)
According to Buff City Soap's 2025 Franchise Disclosure Document, any insurance carrier providing coverage to a franchisee's Makery must have an A.M. Best rating of at least A-VI. If A.M. Best ratings are discontinued or materially altered, Buff City Soap will accept comparable ratings from a reputable insurance rating service, provided the franchisor approves the service.
This requirement ensures that franchisees obtain insurance from financially stable and reputable carriers, reducing the risk of claims not being paid due to the insurer's financial instability. It also protects Buff City Soap's brand by ensuring that franchisees maintain adequate coverage.
In addition to the A.M. Best rating, all insurance policies must include a waiver of subrogation provision and name Buff City Soap as an additional insured on a primary basis (except for Workers' Compensation). The policies must also provide 30 days' prior written notice to Buff City Soap of any material modification, cancellation, or expiration. These stipulations protect Buff City Soap from potential liabilities and ensure they are informed of any changes to the franchisee's insurance coverage.
The insurance policy cannot have a deductible, self-insured retention, self-funded retention, or any similar provision unless prior written consent is given by Buff City Soap. If consent is given, the deductible or similar provision amount may not exceed $25,000, and the coinsurance percentage will not be less than 80%. These requirements help to ensure that franchisees maintain adequate coverage and that Buff City Soap is protected from potential liabilities.