Does a City Publications franchisee's insurance obligation relieve them of liability under the indemnity provisions in Section 22.B of the Franchise Agreement?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee's obligation to obtain and maintain the foregoing policy or policies shall not be limited in any way by reason of any insurance which may be maintained by Franchisor, nor shall Franchisee's performance of that obligation relieve it of liability under the indemnity provisions set forth in Section 22.B of this Agreement. Franchisee agrees to provide annually a certificate of insurance showing compliance with the foregoing requirements. Such certificate shall state that said policy or policies shall not be canceled or altered without at least thirty (30) days prior written notice to Franchisor and shall reflect
proof of payment of premiums.
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, a franchisee's obligation to obtain and maintain insurance policies does not relieve them of liability under the indemnity provisions in Section 22.B of the Franchise Agreement. This means that even if a City Publications franchisee has the required insurance coverage, they are still responsible for fulfilling the indemnification obligations outlined in Section 22.B of the agreement.
This provision is significant for prospective franchisees because it clarifies that insurance coverage is not a substitute for the franchisee's own liability. The franchisee remains responsible for any liabilities covered by the indemnity provisions, regardless of their insurance coverage. This could include financial responsibility for legal claims, damages, or losses arising from the operation of the franchise.
City Publications requires franchisees to secure specific insurance coverage, including comprehensive general public liability insurance with a minimum coverage of $1,000,000, "All Risk" coverage, worker's compensation, automobile liability insurance with a combined single limit of at least $1,000,000, general property damage insurance, and business interruption insurance. Additionally, franchisees must obtain insurance to cover the indemnity provisions in Section 22.B. The franchisee must name City Publications as an additional insured on these policies.
It is important for potential City Publications franchisees to carefully review Section 22.B of the Franchise Agreement to fully understand the scope of their indemnification obligations and to consult with legal and insurance professionals to ensure they have adequate coverage and understand their potential liabilities.