Can the required insurance coverage for a Closet Storage Concepts franchise be adjusted periodically?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
You must obtain and maintain, at your own expense, insurance coverage to adequately insure your Franchised Business that meets or exceeds any coverage which we require in the Operations Manual or otherwise, and which may periodically be adjusted. The cost of this coverage will vary depending on the insurance carrier's charges, terms of payment, and your history. You are responsible for providing and maintaining written documentation to us verifying all coverage. All insurance policies must contain a separate endorsement naming us and our affiliates as additional insureds using ISO form CG2029 or an equivalent endorsement (no blanket additional insured language is acceptable) and must be written by an insurance carrier accepted by us in writing. No insurance policy may be subject to cancellation, termination, non-renewal or material modification, except upon at least 30 days' prior written notice from the insurance carrier to us. Defense costs cannot erode policy limits. We may designate a preferred insurance agent. If we do, you will not be required to utilize our preferred insurance agent to procure your insurance however, any insurance obtained from another source will be subject to review and approval by our preferred insurance agent, at your cost.
If the lease for the Franchised Business' premises requires you to purchase insurance with higher limits than those required by us, the lease insurance requirements will control.
If you will be engaging in any construction, renovation or build-out of the premises for the Franchised Business, either you or your third party contractor must have in force for the duration of said project, Commercial General Liability insurance and Worker's Compensation and Employer's Liability insurance in the amounts listed above as well as Builder's Risk insurance in an amount approved by us.
We may obtain insurance coverage for your Franchised Business if you fail to do so, at your cost.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 22–26)
What This Means (2025 FDD)
According to Closet Storage Concepts' 2025 Franchise Disclosure Document, the required insurance coverage for franchisees can be adjusted periodically. The franchisee is responsible for obtaining and maintaining insurance coverage that meets or exceeds the coverage requirements outlined in the Operations Manual or as otherwise required by Closet Storage Concepts. These coverage requirements may be adjusted periodically. The cost of the insurance will vary based on the insurance carrier's charges, payment terms, and the franchisee's history. Franchisees must provide written documentation verifying their coverage.
All insurance policies must include an endorsement naming Closet Storage Concepts and its affiliates as additional insureds, using ISO form CG2029 or an equivalent. The insurance carrier must be accepted by Closet Storage Concepts in writing, and the policy must provide at least 30 days' prior written notice to Closet Storage Concepts before any cancellation, termination, non-renewal, or material modification. Defense costs cannot erode the policy limits. Closet Storage Concepts may designate a preferred insurance agent, but franchisees are not required to use them, although any insurance obtained from another source is subject to review and approval by Closet Storage Concepts' preferred agent, at the franchisee's cost.
If the lease for the franchise premises requires higher insurance limits than those required by Closet Storage Concepts, the lease requirements will take precedence. Additionally, if the franchisee engages in any construction, renovation, or build-out of the premises, they or their contractor must maintain Commercial General Liability insurance, Worker's Compensation and Employer's Liability insurance, and Builder's Risk insurance in amounts approved by Closet Storage Concepts. Closet Storage Concepts reserves the right to obtain insurance coverage for the franchisee's business if the franchisee fails to do so, with the cost borne by the franchisee.