Who bears the expense of the insurance policies required for a Clear Pest Pros franchise?
Clear_Pest_Pros Franchise · 2025 FDDAnswer from 2025 FDD Document
cifications can result in the termination of this Agreement. Standards and specifications are updated periodically at our sole determination and are made available to you on our Clear Pest Pros owners' intranet website and in the Operations Manual.
C. INSURANCE.
Before attending either the Initial Training, you promise to purchase and maintain in full force and effect throughout the term of this Agreement and at your expense, insurance protecting you, your employees, and us, our officers, and our employees, against loss, liability, fire, personal injury, death, property damages, or theft arising from, or occurring in connection with, the operation and promotion of the Clear Pest Pros Business. You acknowledge and agree that (a) the insurance you will maintain reflects the minimum amounts of coverage we require, (b) these minimums are not meant to reflect the actual needs you may have, and (c) it is your responsibility to carefully evaluate if these minimums will adequately meet your needs.
All policies will be written by an insurance company(ies) that is/are licensed in the state in which you are doing business, and that has an A.M. Best rating of "A" or better. Currently, you are not obligated by the terms of this Agreement to purchase your insurance from any specific provider, although we reserve the right to specify the specific provider that you must use in the future.
Our current requirements are described below:
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- Umbrella Policy and Commercial General Liability Insurance. You shall maintain a commercial umbrella liability insurance policy with a limit of at least $2,000,000 per occurrence and in the aggregate and shall list the commercial general liability, automobile liability and employers' liability policies as scheduled underlying policies. You shall maintain insurance for "bodily injury," "property damage," and "personal and advertising injury" with no exclusion or limitation applying to the products/completed operations liability coverage. Limits shall be at least $2,000,000 general aggregate, $2,000,000 products and completed operations aggregate, $1,000,000 personal and advertising injury limit, and $1,000,000 per occurrence limit.
Source: Item 22 — CONTRACTS (FDD pages 67–68)
What This Means (2025 FDD)
According to Clear Pest Pros' 2025 Franchise Disclosure Document, the franchisee is responsible for covering the costs of all required insurance policies. The FDD specifies that before attending initial training, the franchisee must purchase and maintain insurance at their own expense. This insurance should protect the franchisee, their employees, and Clear Pest Pros against potential losses, liabilities, personal injury, death, property damage, or theft related to the operation of the Clear Pest Pros business.
The insurance policies must meet the minimum coverage amounts required by Clear Pest Pros. These minimums are not necessarily reflective of the franchisee's actual needs, and it is the franchisee's responsibility to evaluate whether these minimums adequately cover their specific circumstances. The franchisee must ensure that all policies are written by insurance companies licensed in the state where they operate and have an A.M. Best rating of "A" or better.
Clear Pest Pros requires franchisees to provide proof of insurance coverage and premium payments before commencing operations and whenever changes are made to the policy. If a franchisee fails to maintain the required insurance, Clear Pest Pros has the option to obtain the necessary coverage on the franchisee's behalf, and the franchisee is then obligated to reimburse Clear Pest Pros for all costs and premiums incurred. The franchisee must also report all material claims or potential claims to both the insurer and Clear Pest Pros promptly. Clear Pest Pros also retains the right to modify the minimum insurance requirements with 30 days' notice, and franchisees must comply with any such modifications.