Can Caring Senior Service require assignment of policy rights to them for insurance coverage?
Caring_Senior_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition to the purchases or leases described above, you must obtain and maintain, at your own expense, the insurance coverages that we require. We may regulate the types, amounts, terms and conditions of insurance coverage required for your Business and standards for underwriters of policies providing required insurance coverage; our protection and rights under such policies as an additional named insured; required or impermissible insurance contract provisions; assignment of policy rights to us; periodic verification of insurance coverage that must be furnished to us; our right to obtain insurance coverage at your expense if you fail to obtain required coverage; our right to defend claims; and similar matters relating to insured and uninsured claims. Our insurance requirements are included in the Operations Manual or otherwise in writing and may be periodically updated. You must comply with any changes to our insurance requirements, at your expense.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 21–23)
What This Means (2025 FDD)
According to Caring Senior Service's 2025 Franchise Disclosure Document, Caring Senior Service has the right to require franchisees to assign policy rights to them regarding insurance coverage. This means that Caring Senior Service can dictate the terms and conditions of the insurance policies a franchisee must maintain, including the assignment of rights to Caring Senior Service.
This requirement gives Caring Senior Service significant control over the franchisee's insurance policies. It allows Caring Senior Service to manage claims, ensure adequate coverage, and protect its interests as well as those of the franchisee. The FDD also states that Caring Senior Service may regulate the types, amounts, terms, and conditions of insurance coverage, standards for underwriters, required or impermissible insurance contract provisions, and periodic verification of coverage.
The franchisee is responsible for obtaining and maintaining the required insurance coverages at their own expense. If a franchisee fails to obtain the required coverage, Caring Senior Service has the right to obtain insurance coverage on the franchisee's behalf, and the franchisee must reimburse Caring Senior Service for these costs. This ensures that all franchisees maintain the necessary insurance, protecting both the franchisee and Caring Senior Service from potential liabilities.
Caring Senior Service currently requires franchisees to maintain several insurance coverages, including professional liability, general liability, hired and non-owned automobile liability coverage, crime coverage, workers compensation, employment practices liability, and property coverage. The specific limits for these coverages are detailed in the FDD, such as commercial general liability insurance of not less than $3,000,000 in the aggregate and professional liability of not less than $3,000,000 in the aggregate and $1,000,000 per claim. Franchisees must maintain all required policies during the entire term of the Franchise Agreement and any renewal terms, and Caring Senior Service may periodically increase or decrease the required coverage amounts.