What are Canopy Lawn Care's responsibilities regarding compliance with insurance policies affecting the leased vehicles?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
Lessee agrees to allow only duly authorized, licensed and insured drivers to use and operate the Vehicles.
Lessee agrees to comply with, and cause its drivers to comply with, all laws, statutes, rules, regulations and ordinances (including without limitation such federal, state and local laws, statutes, rules, regulations and ordinances governing autonomous vehicles and automated driving systems and any parts, components and products related thereto) and the provisions of all insurance policies affecting or covering the Vehicles or their use or operation.
Lessee, its drivers, servants and agents agree to cooperate fully with Lessor, Servicer, any other agent of Lessor and any insurance carriers in the investigation, defense and prosecution of all claims or suits arising from the use or operation of any Vehicle. If any claim is made or action commenced for death, personal injury or property damage resulting from the ownership, maintenance, use or operation of any Vehicle, Lessee will promptly notify Lessor of such action or claim and forward to Lessor a copy of every demand, notice, summons or other process received in connection with such claim or action.
- (a) Lessee agrees to purchase and maintain in force during the Term, insurance policies in at least the amounts listed below covering each Vehicle, to be written by an insurance company or companies satisfactory to Lessor, insuring Lessee, Lessor and any other person or entity designated by Lessor against any damage, claim, suit, action or liability, and that Lessor will suffer immediate and irreparable harm if Lessee fails to comply with such obligations:
If the requirements of any governmental or regulatory agency exceed the minimums stated in this Agreement, Lessee must obtain and maintain the higher insurance requirements. Lessee agrees that each required policy of insurance will by appropriate endorsement or otherwise name Lessor and any other person or entity designated by Lessor as additional insureds and loss payees, as their respective interests may appear. Further, each such insurance policy must provide the following: (i) that the same may not be cancelled, changed or modi ed until after the insurer has given to Lessor, Servicer and any other person or entity designated by Lessor at least thirty (30) days prior written notice of such proposed cancellation, change or modi cation, (ii) that no act or default of Lessee or any other person or entity shall affect the right of Lessor, Servicer, any other agent of Lessor or any of their respective successors or assigns to recover under such policy or policies of insurance in the event of any loss of or damage to any Vehicle and (iii) that the coverage is "primary coverage" for the protection of Lessee, Lessor, Servicer, any other agent of Lessor and their respective successors and assigns notwithstanding any other coverage carried by Lessee, Lessor, Servicer, any other agent of Lessor or any of their respective successors or assigns protecting against similar risks. Original certi cates evidencing such coverage and naming Lessor, Servicer, any other agent of Lessor and any other person or entity designated by Lessor as additional insureds and loss payees shall be furnished to Lessor prior to the Delivery Date, and annually thereafter and/or as reasonably requested by Lessor from time to time. In the event of default, Lessee hereby appoints Lessor, Servicer and any other agent of Lessor as Lessee's attorney-in-fact to receive payment of, to endorse all checks and other documents and to take any other actions necessary to pursue insurance claims and recover payments if Lessee fails to do so.
Source: Item 23 — RECEIPT (FDD pages 55–199)
What This Means (2025 FDD)
According to the 2025 Canopy Lawn Care FDD, the franchisee (Lessee) has specific responsibilities regarding compliance with insurance policies affecting vehicles leased through the Master Equity Lease Agreement. The franchisee must ensure that only authorized, licensed, and insured drivers operate the vehicles. Furthermore, the franchisee must comply with all laws, statutes, rules, regulations, and ordinances, including those governing autonomous vehicles, as well as the provisions of all insurance policies related to the vehicles' use and operation.
Canopy Lawn Care franchisees are also required to cooperate fully with the Lessor (Canopy Franchise Corporation), its agents, and any insurance carriers in the investigation, defense, and prosecution of claims arising from the use or operation of any vehicle. If a claim or action is initiated for death, personal injury, or property damage, the franchisee must promptly notify the Lessor and provide copies of all related demands, notices, summonses, or other processes.
The FDD also specifies that the franchisee must purchase and maintain insurance policies in the amounts listed, ensuring that the policies are written by an insurance company satisfactory to the Lessor. These policies must protect the franchisee, Lessor, and any other designated entity against damage, claims, suits, actions, or liabilities. The franchisee is responsible for ensuring that each required insurance policy names the Lessor and any other designated party as additional insureds and loss payees. Original certificates of coverage must be provided to the Lessor before the Delivery Date and annually thereafter, or as reasonably requested. If the franchisee defaults, the Lessor has the power of attorney to handle insurance claims and payments.
If the requirements of any governmental or regulatory agency exceed the minimums stated in the agreement, the franchisee must obtain and maintain the higher insurance requirements. The insurance policies must also include provisions that they cannot be cancelled, changed, or modified without at least thirty days' prior written notice to the Lessor, Servicer, and any other designated person or entity. Additionally, the policies must ensure that no act or default of the franchisee affects the right of the Lessor or its agents to recover under the insurance policies in the event of any loss or damage to any vehicle, and that the coverage is primary coverage for the protection of all parties involved.