What clause must Christian Brothers Automotive's fire and extended coverage insurance policies include?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
Tenant hereby releases Lessor and Owner to the extent of Tenant's insurance coverage, from any and all liability for any loss or damage caused by fire or any of the extended coverage casualties, even if such fire or other casualty are brought about by the fault or negligence of Lessor or Owner, its servants or agents, provided, however, this release will be in force and effect only with respect to loss or damage occurring during such time as Tenant's policies of fire and extended coverage contain (or would contain, if Tenant had made a reasonable effort to obtain same) a clause to the effect that this release will not affect policies or the right of Tenant to recover thereunder.
Tenant agrees that its fire and extended coverage insurance policies will include such a clause so long as the same is obtainable without extra cost, or if extra cost is chargeable therefore, so long as Lessor
Source: Item 23 — RECEIPTS (FDD pages 76–372)
What This Means (2025 FDD)
According to the 2025 Christian Brothers Automotive Franchise Agreement, the franchisee's fire and extended coverage insurance policies must include a clause that ensures a release of liability for the Lessor and Owner, to the extent of the franchisee's insurance coverage, from any loss or damage caused by fire or extended coverage casualties. This release applies even if the fire or other casualty is due to the fault or negligence of the Lessor or Owner, their servants, or agents.
However, this release is only effective if the franchisee's policies contain a clause stating that the release will not affect the policies or the franchisee's right to recover under them. Christian Brothers Automotive requires that the franchisee's fire and extended coverage insurance policies include such a clause, provided it can be obtained without extra cost. If there is an extra cost, Christian Brothers Automotive will require the clause as long as the Lessor agrees to pay the additional expense.
In practical terms, this means a Christian Brothers Automotive franchisee needs to ensure their insurance policy includes specific language protecting their right to recover under the policy, even with the liability release. This clause is intended to balance the interests of the landlord (Lessor) and the franchisee (Tenant) in the event of a loss. The franchisee should confirm with their insurance provider that the policy includes the necessary clause and understand any potential extra costs associated with it.