Does a Bumper Man franchisee release the franchisor from claims relating to the procurement of insurance?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) Franchisee Acknowledgment as to Minimum Insurance Requirements. Franchisee acknowledges and agrees that the coverages required by Franchisor are the minimum amounts of coverage that Franchisee must procure under this Agreement. Franchisee is free to buy additional insurance coverage or increase the amounts of coverage as Franchisee deems appropriate based on Franchisee's investigation as to whether additional coverages or higher amounts are necessary. Franchisee further acknowledges and agrees that Franchisee is not relying upon Franchisor to determine the amount or type of insurance coverage necessary for Franchisee. FRANCHISEE RELEASES FRANCHISOR FROM ANY AND ALL CLAIMS RELATING TO THE PROCUREMENT OF INSURANCE INCLUDING CLAIMS THAT FRANCHISOR DID NOT REQUIRE FRANCHISEE TO PROCURE ADEQUATE INSURANCE.
Source: Item 23 — RECEIPTS (FDD pages 45–180)
What This Means (2025 FDD)
According to the 2025 Bumper Man Franchise Disclosure Document, a franchisee releases Bumper Man from any claims related to the procurement of insurance. Specifically, this release includes claims that Bumper Man did not require the franchisee to procure adequate insurance coverage. This means that the franchisee acknowledges they are responsible for determining the appropriate amount and type of insurance needed for their Bumper Business.
This clause has significant implications for prospective franchisees. It emphasizes that Bumper Man's minimum insurance requirements, as outlined in Exhibit E, are just that—minimums. Franchisees must conduct their own due diligence to assess whether additional coverage or higher limits are necessary for their specific circumstances. They cannot rely on Bumper Man to dictate the precise insurance needed and cannot hold Bumper Man liable if their insurance proves inadequate.
This type of release is not uncommon in franchising. Franchisors often set minimum insurance standards but leave the ultimate responsibility for adequate coverage to the franchisee. This is because the specific risks and needs of each franchise location can vary. By signing this release, a Bumper Man franchisee accepts the responsibility for ensuring they have sufficient insurance to protect their business.
Prospective Bumper Man franchisees should carefully consider this clause and consult with an insurance professional to determine the appropriate level of coverage for their Bumper Business. They should not solely rely on Bumper Man's minimum requirements and should understand that they are releasing Bumper Man from any liability related to the adequacy of their insurance coverage.