What is the effect of waiving subrogation on a Counselor Realty franchisee's insurance policy for Counselor Realty?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
Business and any change in the Franchisee's organizational documents.
- 8.2 Insurance. You must maintain types and levels of insurance coverage required by the state in which you operate your Business. You also must maintain other insurance required by law, and by your Office (including any Additional Office and Extension Office) lease or mortgage, and errors and omissions insurance coverage. You must maintain general liability insurance on an occurrence basis with a minimum limit of at least $1,000,000 per occurrence and $2,000,000 in the aggregate, and errors and omission insurance with a minimum limit of at least $1,000,000. Insurance shall be with insurers and on forms acceptable to us, shall name Counselor as an additional insured, and waive subrogation. If we buy such insurance because you fail to do so (which we may, but ar
Source: Item 22 — CONTRACTS (FDD page 32)
What This Means (2025 FDD)
According to Counselor Realty's 2025 Franchise Disclosure Document, franchisees are required to maintain certain types and levels of insurance coverage, including general liability insurance with a minimum limit of $1,000,000 per occurrence and $2,000,000 in the aggregate, and errors and omission insurance with a minimum limit of at least $1,000,000. These insurance policies must name Counselor Realty as an additional insured and include a waiver of subrogation.
The waiver of subrogation means that the insurance company providing coverage to the Counselor Realty franchisee gives up its right to seek compensation from Counselor Realty for any claims they pay out to the franchisee that could be attributed to Counselor Realty's actions. In simpler terms, even if Counselor Realty's actions lead to a claim against the franchisee, the insurance company cannot sue Counselor Realty to recover the money they paid out on the claim. This protects Counselor Realty from potential lawsuits by the franchisee's insurance company.
For a prospective Counselor Realty franchisee, this requirement means they must ensure their insurance policies include this waiver, potentially impacting the cost and availability of insurance. It is essential to discuss this requirement with their insurance provider to understand the implications and ensure compliance with Counselor Realty's stipulations. Failure to maintain the required insurance, including the waiver of subrogation, could lead to Counselor Realty securing the insurance themselves and requiring immediate reimbursement from the franchisee.