What is a requirement regarding Bumper Man's insurance policies being primary and non-contributory?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
At least two weeks prior to the date upon which we approve you to commence operation of your Bumper Business, you must obtain all required insurance policies. The insurance carrier must be rated A+ or better by A.M. Best Company and be authorized to transact business in the state where the Designated Area is located and the policies must: (1) include a waiver of subrogation provision or endorsement in favor of us; (2) be primary and non-contributory to any other insurance that we have procured for ourselves; and (3) provide for 30 days' prior written notice to us of any material modification, cancellation, or expiration of such policy. The endorsements must not contain language that limits the liability afforded to us to any amount less than the amount stated on the declarations page of each policy. No insurance policy will contain a provision that in any way limits or reduces
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 18–20)
What This Means (2025 FDD)
According to Bumper Man's 2025 Franchise Disclosure Document, the insurance policies a franchisee obtains must be primary and non-contributory to any other insurance that Bumper Man has secured for itself. This requirement is part of a larger set of stipulations around insurance, which must be in place at least two weeks before the franchisee begins operations.
In practical terms, this means that if both the franchisee and Bumper Man have insurance coverage for the same incident, the franchisee's policy must pay out first, without relying on Bumper Man's insurance to contribute. This protects Bumper Man's insurance rates and coverage, as claims are handled primarily through the franchisee's insurance.
Furthermore, the insurance carrier must have an A+ rating or better from A.M. Best Company and be authorized to conduct business in the state where the franchisee's designated area is located. The policies must also include a waiver of subrogation in favor of Bumper Man and provide for 30 days' prior written notice to Bumper Man of any material modification, cancellation, or expiration of the policy. These stipulations ensure that Bumper Man is well-protected and informed about any changes to the franchisee's insurance coverage.