Does Cr3 American Exteriors need to be named as an additional insured on all insurance policies?
Cr3_American_Exteriors Franchise · 2025 FDDAnswer from 2025 FDD Document
Insurance**.**
You must obtain and maintain, at your own expense, such insurance coverage as required by your state laws. Moreover, you must obtain and maintain insurance coverage as we require, which may exceed insurance coverage required by your state laws. All insurance policies must name us as an "additional insured". You must purchase the required insurance at least 30 days before opening your CR3 American Exterior Business or upon signing a lease for the Approved Location or commercial office/warehouse or flex space, whichever is earlier.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 25–29)
What This Means (2025 FDD)
According to Cr3 American Exteriors's 2025 Franchise Disclosure Document, franchisees are required to obtain and maintain specific insurance coverage, and all insurance policies must name Cr3 American Exteriors as an "additional insured". This requirement is in addition to any insurance coverage mandated by state laws, and Cr3 American Exteriors can require coverage exceeding those state law minimums. Franchisees must secure the required insurance at least 30 days before opening their Cr3 American Exteriors Business or upon signing a lease for the Approved Location or commercial office/warehouse or flex space, whichever is earlier.
This requirement ensures that Cr3 American Exteriors is protected against potential liabilities arising from the franchisee's operations. By being named as an additional insured, Cr3 American Exteriors can directly benefit from the franchisee's insurance coverage in the event of a claim. This is a common practice in franchising, as it provides an added layer of security for the franchisor and helps to maintain the brand's reputation.
The FDD also specifies minimum coverage types and amounts that franchisees must maintain. These include Comprehensive General Liability with $1,000,000 per occurrence and $2,000,000 aggregate, Commercial Automobile Liability with $1,000,000 each accident, Contractors Errors & Omissions with $1,000,000 per occurrence and $1,000,000 aggregate, and Workers Compensation with $1,000,000 each accident/incident/employee. Additionally, Contractors Pollution Liability, Property/Business Interruption, Cyber Liability, Employment Practices Liability, and Umbrella policies are required with specific minimum amounts. Franchisees must ensure that their insurance policies meet these minimum requirements and that Cr3 American Exteriors is named as an additional insured on all policies.
Prospective franchisees should carefully review the insurance requirements outlined in the FDD and consult with an insurance professional to ensure they can obtain the necessary coverage. Failing to comply with these insurance requirements could result in a breach of the Franchise Agreement and potential termination of the franchise.