Does Chocolate Bash require that insurance policies be primary and noncontributing with any insurance carried by them?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
- B. Insurance. You must obtain insurance as described in the Franchise Agreement and in our Manual, which includes (i) "Special" causes of loss coverage forms, including fire and extended coverage, crime, vandalism, and malicious mischief, on all property of the Business, for full repair and replacement value (subject to a reasonable deductible); (ii) Business interruption insurance covering at least 12 months of income; (iii) Commercial General Liability insurance, including products liability coverage, and broad form commercial liability coverage, written on an "occurrence" policy form in an amount of not less than $1,000,000 single limit per occurrence and $2,000,000 aggregate limit, (iv) Workers Compensation coverage as required by state law. Your policies (other than Workers Compensation) must list us and our affiliates as an additional insured, must include a waiver of subrogation in favor of us and our affiliates, must be primary and noncontributing with any insurance carried by us or our affiliates, and must stipulate that we receive 30 days' prior written notice
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 15–17)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, franchisees are required to maintain specific insurance coverage, and these policies, with the exception of Workers Compensation, must adhere to particular conditions. Chocolate Bash mandates that these insurance policies list Chocolate Bash and its affiliates as additional insured parties.
Furthermore, the policies must include a waiver of subrogation in favor of Chocolate Bash and its affiliates. Most importantly, the insurance coverage must be primary and noncontributing with any insurance carried by Chocolate Bash or its affiliates. This means that in the event of a claim, the franchisee's insurance policy is the first one to respond and pay out, without requiring Chocolate Bash's insurance to contribute.
Finally, Chocolate Bash requires that they receive 30 days' prior written notice of cancellation for these insurance policies. This allows Chocolate Bash to ensure continuous coverage and protect their interests. Franchisees should carefully review these insurance requirements with their insurance provider to ensure full compliance and avoid potential breaches of the franchise agreement.