Besides reimbursement, what other consequences might a Bumble Roofing franchisee face for failing to maintain required insurance?
Bumble_Roofing Franchise · 2025 FDDAnswer from 2025 FDD Document
- (d) In the event Franchisee fails to obtain the required insurance and to keep the same in full force and effect, Franchisor may, but shall not be obligated to, purchase insurance on Franchisee's behalf from an insurance carrier of Franchisor's choice, and Franchisee must reimburse Franchisor for the cost of the insurance plus 10% plus interest for any amounts Franchisor pays on behalf of Franchisee due to Franchisee's failure to meet the insurance obligations.
This remedy is cumulative to all other remedies.
Notwithstanding the foregoing, failure of Franchisee to obtain insurance constitutes a material breach of this Agreement entitling Franchisor to terminate this Agreement or exercise any or a combination of the other default remedies set forth in Section 17 of this Agreement.
- (e) Franchisee's obligation to obtain and maintain insurance coverage in the amounts required by Franchisor shall not be limited in any way by reason of any insurance that Franchisor may maintain, nor does Franchisee's procurement of required insurance relieve Franchisee of liability under the indemnity obligations described in Section 12.2.
Franchisee's insurance procurement obligations under this Section are separate and independent of Franchisee's indemnity obligations.
- (f) Franchisor does not represent or warrant that any insurance that Franchisee is required to purchase will provide adequate coverage or protection for Franchisee.
The requirements of insurance specified in this Agreement or the Manual are strictly for Franchisor's protection.
Franchisee should consult with its own insurance agents, brokers, attorneys and other insurance professionals to determine the level of insurance protection it needs and desires, in addition to the coverage and limits required by Franchisor.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to Bumble Roofing's 2025 Franchise Disclosure Document, a franchisee's failure to maintain the required insurance constitutes a material breach of the Franchise Agreement. This breach can lead to significant consequences beyond simply reimbursing Bumble Roofing for any insurance they may purchase on the franchisee's behalf.
Specifically, Bumble Roofing is entitled to terminate the Franchise Agreement if a franchisee fails to obtain or maintain the necessary insurance. Alternatively, Bumble Roofing can exercise any combination of default remedies outlined in Section 17 of the agreement. This means that a Bumble Roofing franchisee could lose their franchise and the right to operate their roofing business due to an insurance lapse.
It is important to note that the franchisee's obligation to maintain insurance coverage is not limited by any insurance Bumble Roofing may carry, nor does it relieve the franchisee of their indemnity obligations. The insurance requirements are primarily for Bumble Roofing's protection, and franchisees are advised to consult with their own insurance professionals to determine the appropriate level of coverage needed beyond the minimum requirements set by Bumble Roofing. This highlights the critical importance of franchisees understanding and adhering to all insurance requirements to avoid potential termination of their franchise agreement.