Regarding insurance policies for Chicken Guy, must the coverages be primary and any insurance carried by additional insured be excess and noncontributory?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) Each insurance policy shall be specifically endorsed to provide that the coverages shall be primary and that any insurance carried by any additional insured shall be excess and noncontributory. The applicable limits of each insurance policy shall be exhausted before any benefits (defense or indemnity) may be obtained under any other insurance (including self-insurance) providing coverage to Chicken Guy. The workers compensation policy shall include a waiver of subrogation in favor of Chicken Guy. In the event payments are required to be made under Chicken Guy's own insurance policies or selfinsurance (whether for defense or indemnity) before the applicable coverage limits for the insurance policies obtained by Developer are exhausted, Developer agrees to reimburse, hold harmless and indemnify Chicken Guy and its insurers for such payments. Developer shall notify its insurers of this Agreement and shall use reasonable efforts to obtain an endorsement on each policy it obtains pursuant to Section 6.B. stating as follows:
The applicable limits of this policy shall be applied and exhausted before any benefits may be obtained (whether for defense or indemnity) under any other insurance (including self-insurance) that may provide coverage to Chicken Guy. All insurance coverage obtained by Chicken Guy shall be considered excess insurance with respect to this policy, the benefits of which excess insurance shall not be available until the applicable limits of this policy are exhausted.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, the insurance policies that the developer (franchisee) is required to maintain must be specifically endorsed to ensure that the coverages are primary. This means that Chicken Guy's insurance coverage will be considered excess and noncontributory. The developer's insurance must be exhausted before any benefits (defense or indemnity) can be obtained from any other insurance, including self-insurance, that provides coverage to Chicken Guy. The workers compensation policy must also include a waiver of subrogation in favor of Chicken Guy.
If payments are required under Chicken Guy's own insurance policies or self-insurance before the developer's coverage limits are exhausted, the developer is responsible for reimbursing, holding harmless, and indemnifying Chicken Guy and its insurers for those payments. The developer must inform their insurers about this agreement and make reasonable efforts to obtain an endorsement on each policy stating that its limits will be applied and exhausted before any benefits are available from other insurance covering Chicken Guy.
This requirement ensures that Chicken Guy is protected and that the franchisee's insurance bears the primary responsibility for covering any liabilities. It also means that franchisees need to carefully review their insurance policies to ensure they meet these specific endorsement requirements and understand their obligations to reimburse Chicken Guy for any payments made under Chicken Guy's insurance due to the franchisee's policy limits not being exhausted.