Who must the insurance companies be acceptable to, besides the tenant, for Christian Brothers Automotive?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
All policies of insurance described in this Section 20 which Tenant is required to procure and maintain will be issued by responsible insurance companies, having a claims-paying ability rating of "A" or higher as ascribed by S&P, be considered equivalent to a NAIC 1 or other rating acceptable to the Securities Valuation Office of the National Association of Insurance Commissioners, and in all other respects be reasonably acceptable to Lessor and qualified and licensed to do business in the state in which the Premises are situated.
Source: Item 23 — RECEIPTS (FDD pages 76–372)
What This Means (2025 FDD)
According to Christian Brothers Automotive's 2025 Franchise Disclosure Document, the insurance companies providing coverage to the tenant (franchisee) must be reasonably acceptable to the Lessor.
Specifically, the insurance companies must have a claims-paying ability rating of "A" or higher as ascribed by S&P, or be considered equivalent to a NAIC 1 or other rating acceptable to the Securities Valuation Office of the National Association of Insurance Commissioners. Additionally, the insurance company must be qualified and licensed to conduct business in the state where the premises are located.
This requirement ensures that Christian Brothers Automotive franchisees maintain adequate insurance coverage from reputable and financially stable providers, protecting both the franchisee and the lessor (property owner) from potential financial losses. It also allows the lessor to have a say in the selection of the insurance company to ensure they are comfortable with the insurer's ability to meet potential claims.