Does the Bumper Man franchisor have the right to inspect the actual insurance policies of the franchisee?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Proof of Insurance. At least two weeks prior to the Commencement Date, thereafter, at least 30 days prior to the expiration of any such policy, Franchisee will deliver to Franchisor evidence of such insurance in the form of certificates evidencing such coverage as well as endorsements reflecting the requirements of this Section 13 and all language wherever found in the policies that related to the determination of who is an additional insured, and the scope of the additional insured's coverage. Franchisor has the right, but not the obligation to inspect any actual policies required under this Agreement for compliance with all specified coverage, terms, conditions, endorsements, and limits relative to this Agreement.
- (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 Bumper Man's 2025 Franchise Disclosure Document, Bumper Man has the right to inspect the franchisee's insurance policies. Specifically, Bumper Man has the right, but not the obligation, to inspect the actual insurance policies required under the Franchise Agreement. This inspection is to ensure compliance with all specified coverage terms, conditions, endorsements, and limits relative to the agreement.
Prior to the commencement date of the franchise, and at least 30 days before the expiration of any insurance policy, the franchisee must provide Bumper Man with evidence of insurance. This evidence must be in the form of certificates evidencing coverage, endorsements reflecting the requirements of Section 13 of the agreement, and all policy language related to the determination of who is an additional insured and the scope of their coverage.
This requirement ensures that the franchisee maintains adequate insurance coverage as mandated by Bumper Man. It also allows Bumper Man to verify that the insurance policies meet the minimum requirements outlined in Exhibit E of the Franchise Agreement, which may be amended by Bumper Man from time to time. The franchisee also acknowledges that the coverages required by Bumper Man are the minimum amounts and that the franchisee is free to buy additional insurance coverage or increase the amounts of coverage as the Franchisee deems appropriate.