What happens if a Counselor Realty franchisee fails to maintain the required insurance?
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 must maintain the types and levels of insurance coverage required by the state in which they operate their business. This includes other insurance required by law and by their office lease or mortgage, as well as errors and omissions insurance coverage. Specifically, franchisees 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. The insurance must be with insurers and on forms acceptable to Counselor Realty, name Counselor Realty as an additional insured, and waive subrogation.
If a Counselor Realty franchisee fails to maintain the required insurance, Counselor Realty has the option, but not the obligation, to buy such insurance. If Counselor Realty does purchase the insurance on behalf of the franchisee, the franchisee must reimburse Counselor Realty immediately upon request.
This requirement ensures that both the franchisee and Counselor Realty are protected from potential liabilities arising from the operation of the business. The franchisee bears the responsibility of maintaining adequate insurance coverage, and failure to do so can result in Counselor Realty stepping in to secure the necessary coverage at the franchisee's expense. This is a fairly standard clause in franchise agreements, as franchisors need to protect their brand and avoid liability from franchisee actions.