What is the Practice required to do with the insurance policies related to the Medical Equipment for C3 Wellness Spa?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
During the Term, Practice must maintain insurance coverage for the full value of the Medical Equipment and insurance coverage against liability for bodily injury, including death, and property damage arising out of the ownership, maintenance, use and operation of the Medical Equipment with limits acceptable to Manager.
Practice must ensure the policies name Manager as additional insured and provide a waiver of subrogation in favor of Manager.
Such coverage must be in a form acceptable to Manager and Practice must deliver all policies of insurance, or evidence satisfactory to Manager of such coverage, upon Manager's request.
Practice's insurer must agree, by endorsement upon the policy issued by it, or by an independent document provided to Manager, that it will give Manager 30 days prior written notice of the effective date of any alteration or cancellation of such policy and that such notice will be sent to Manager via certified mail, return receipt requested at the address in this Agreement.
Except as otherwise provided in this Agreement, Practice assumes the risk of loss of, or damage to the Medical Equipment from any and every cause whatsoever, including, but not limited to, casualty, collision, upset, fire, theft, malicious mischief, vandalism, graffiti, glass breakage, and mysterious disappearance.
Source: Item 23 — RECEIPTS (FDD pages 59–293)
What This Means (2024 FDD)
According to C3 Wellness Spa's 2024 Franchise Disclosure Document, the Practice (which refers to the franchisee) has specific obligations regarding insurance for the medical equipment. The franchisee must maintain insurance coverage for the full value of the medical equipment. This protects against loss or damage to the equipment itself. Additionally, the franchisee needs to secure insurance coverage against liability for bodily injury (including death) and property damage that might arise from the ownership, maintenance, use, or operation of the medical equipment. The insurance coverage limits must be acceptable to the Manager (likely the franchisor or a related entity).
Beyond just obtaining the right coverage amounts, C3 Wellness Spa requires that the insurance policies name the Manager as an additional insured. This provides the Manager with direct protection under the franchisee's insurance policies. The franchisee must also ensure the policies include a waiver of subrogation in favor of the Manager, which prevents the insurance company from pursuing the Manager to recover claim payments made to the franchisee.
The insurance coverage must be in a form acceptable to the Manager, giving C3 Wellness Spa control over the types of policies used. The franchisee is obligated to deliver all insurance policies or satisfactory evidence of coverage to the Manager upon request, allowing the franchisor to verify compliance. Furthermore, the franchisee's insurer must agree to provide the Manager with 30 days' prior written notice, sent via certified mail with return receipt requested, before any alteration or cancellation of the policy. This ensures the Manager is informed of any changes to the insurance coverage affecting the medical equipment.
Finally, C3 Wellness Spa stipulates that the franchisee assumes the risk of loss or damage to the medical equipment from any cause, including events like casualty, fire, theft, or vandalism, unless otherwise provided in the agreement. This places the financial burden of equipment loss or damage squarely on the franchisee, reinforcing the importance of maintaining adequate insurance coverage as mandated by the franchise agreement.