Is Counselor Realty obligated to buy insurance for a Counselor Realty franchisee who fails to do so?
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 specific types and levels of insurance coverage. This includes coverage mandated by the state in which they operate, insurance required by their office lease or mortgage, and errors and omissions insurance. The franchisee must also 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 policies must be with insurers and on forms acceptable to Counselor Realty, name Counselor Realty as an additional insured, and waive subrogation.
While Counselor Realty sets the standards for insurance coverage, the franchisee is ultimately responsible for obtaining and maintaining the required insurance. However, Counselor Realty retains the option, but not the obligation, to procure the necessary insurance if the franchisee fails to do so.
If Counselor Realty chooses to buy insurance on behalf of a non-compliant franchisee, the franchisee is obligated to reimburse Counselor Realty immediately upon request for the costs incurred. This clause protects Counselor Realty from potential liabilities arising from the franchisee's failure to maintain adequate insurance and ensures that the franchisee bears the financial responsibility for any insurance purchased on their behalf.