Is a Chem-Dry franchisee required to use the insurance broker that CDI has negotiated with?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
damage), with the proper graphics package.
CDI has negotiated with an insurance broker to provide insurance coverage to you according to our specifications at a discounted rate. You are not required to use this insurance broker; however, you must obtain and maintain the following minimum business liability coverage as well as vehicle liability coverage as a condition for receiving or maintaining a franchise:
- The minimum amount of business (general) liability coverage required is $1,000,000 per occurrence.
- The minimum amount of $100,000/$400,000/$75,000 (or $500,000 Combined Single Limit) is required for the vehicle liability coverage. All non-owned or hired vehicles must be insured with the same limits.
- CDI, its parents, and BFG National Accounts (and their officers, directors, employees, agents and affiliates and subsidiaries) must be named as additional insureds on both the General Liability and Vehicle Liability insurance policies.
- The business liability insurance policy must state that the work product is covered at a minimum of $50,000 per occurrence, or that there is no "workmanship" or "care, custody, and control" exclusion.
- You must also have Workers Compensation insurance based on statutory requirements.
You must submit to us an acceptable Certificate of Insurance for the Business, any vehicles used in the business and the workers compensation coverage required in your state within 30 days after you and we sign the Franchise Agreement and then annually prior to the expiration of your insurance coverage showing renewal or replacement with coverage conforming to our insurance requ
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 31–33)
What This Means (2024 FDD)
According to Chem-Dry's 2024 Franchise Disclosure Document, franchisees are not required to use the insurance broker that CDI (Chem-Dry's parent company) has negotiated with. However, Chem-Dry franchisees must obtain and maintain specific minimum business and vehicle liability coverage as a condition of receiving or maintaining their franchise.
The minimum business (general) liability coverage required is $1,000,000 per occurrence. Vehicle liability coverage must be at least $100,000/$400,000/$75,000 (or $500,000 Combined Single Limit), and this coverage must extend to all non-owned or hired vehicles. Additionally, CDI, its parents, and BFG National Accounts must be named as additional insureds on both the General Liability and Vehicle Liability insurance policies. The business liability insurance policy must also state that the work product is covered at a minimum of $50,000 per occurrence, or that there is no "workmanship" or "care, custody, and control" exclusion. Franchisees must also maintain Workers Compensation insurance based on statutory requirements.
Chem-Dry franchisees must submit an acceptable Certificate of Insurance for the Business, any vehicles used in the business, and the workers compensation coverage within 30 days of signing the Franchise Agreement, and annually thereafter. This certificate must show renewal or replacement coverage that conforms to Chem-Dry's insurance requirements and includes the proper additional insureds. While Chem-Dry has negotiated discounted rates with an insurance broker, franchisees have the option to seek insurance coverage from other providers as long as they meet the minimum coverage requirements and other stipulations set by Chem-Dry.