What article in the Cordova franchise agreement discusses insurance requirements?
Cordova Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Insurance – You must obtain the insurance coverage that we require from time to time as presently disclosed in the Manuals and as we may modify. All insurance policies required under your Franchise Agreement and as set forth in the Franchise Agreement must be written by a responsible carrier, reasonably acceptable to us, and all insurance (excluding workers' compensation) must name us, our officers, directors, shareholders, partners, agents, representatives and independent contractors as additional insureds. The insurance policies must include a provision that the insurance carrier must provide us with no less than 30 days' prior written notice in the event of a material alteration to, or cancellation of, any insurance policy. A certificate of insurance must be furnished by you to use at the earlier of 90 days after the Effective Date of the Franchise Agreement or prior to the commencement of our initial training program. Insurance coverage must be at least as comprehensive as the minimum requirements set forth below and in the Franchise Agreement (Franchise Agreement, Article 8). You must consult your carrier representative to determine the level of coverage necessary for the Franchised Business. Higher exposures may require higher limits.
Insurance Requirements
- a) Comprehensive general liability insurance, written on an occurrence basis, extended to include contractual liability, products and completed operations, and personal and advertising injury, with a combined bodily injury and property damage limit of at least $1,000,000 per occurrence and $2,000,000 in the aggregate, with a primary and non-contributory clause included;
- b) Professional lability (errors and omissions) insurance, with a limit of at least $1,000,000 per claim and $2,000,000 in the aggregate, with coverage against claims related to professional services, errors, omissions, or negligence in staffing, recruitment, and placement services;
- c) Statutory workers' compensation insurance as required by the law of the state in which the Franchised Business is located, with a limit of at least $500,000 per accident, $500,000 per disease (per employee), and $500,000 per disease (policy limit);
- d) Employment practices liability insurance with a limit of at least $250,000 per claim, including coverage for hiring, wrongful termination, harassment, discrimination, and wage and hour disputes;
- e) Optional cyber insurance in the amount of at least $500,000 per occurrence and $1,000,000 in the aggregate, with coverage for data breaches, cyber extortion, and regulatory fines related to data loss and a technology errors and omissions inclusion;
- f) Optional commercial crime/fidelity bond with minimum coverage of $100,000 and protecting against employee theft, fraud, and dishonest acts;
- g) Optional business automobile insurance, including liability insurance coverage for hired and non-owned automobiles, with a combined single bodily injury and property damage limit of at least $1,000,000 per occurrence; and
- h) All other insurance that we require in the Manuals or that is required by law or by the lease or su
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD page 22)
What This Means (2025 FDD)
According to Cordova's 2025 Franchise Disclosure Document, Article 8 of the Franchise Agreement outlines the insurance requirements for franchisees. Item 8 discusses restrictions on sources of products and services, including insurance.
Cordova franchisees must obtain insurance coverage that meets the franchisor's requirements, as detailed in the manuals, which may be modified over time. The insurance policies must be written by a carrier acceptable to Cordova, and the franchisor, along with its officers, directors, and other related parties, must be named as additional insureds (excluding workers' compensation). The insurance policies must include a provision for at least 30 days' prior written notice to Cordova in case of material alteration or cancellation. Franchisees must furnish a certificate of insurance to Cordova within 90 days of the Franchise Agreement's effective date or before the start of initial training.
The required insurance coverage must be at least as comprehensive as the minimum requirements outlined in the Franchise Agreement. It is the franchisee's responsibility to consult with their insurance carrier to determine the necessary level of coverage for their Cordova business, considering that higher exposures may necessitate higher limits.
Specifically, the FDD lists several insurance types and minimum coverage amounts that Cordova may require. These include comprehensive general liability insurance ($1,000,000 per occurrence and $2,000,000 in the aggregate), professional liability insurance ($1,000,000 per claim and $2,000,000 in the aggregate), statutory workers' compensation insurance ($500,000 limits), and employment practices liability insurance ($250,000 per claim). Optional coverages include cyber insurance ($500,000 per occurrence and $1,000,000 in the aggregate), commercial crime/fidelity bond ($100,000 minimum coverage), and business automobile insurance ($1,000,000 limit). Cordova may also require other insurance as specified in the manuals, by law, or by the lease for the Franchised Business.