Are Crown Gold Exchange franchisees required to obtain insurance policies that are primary and non-contributing with any insurance carried by the franchisor?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
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- B. Insurance. You must obtain insurance as described in the Franchise Agreement and in our Brand Standards Manual, which includes (i) "Special" causes of loss coverage forms, including fire and extended coverage, crime, vandalism, and malicious mischief, on all property of the Business, for full repair and replacement value (subject to a reasonable deductible); (ii) Business interruption insurance covering at least 12 months of income; (iii) Commercial General Liability insurance, including products liability coverage, and broad form commercial liability coverage, written on an "occurrence" policy form in an amount of not less than $1,000,000 single limit per occurrence and $2,000,000 aggregate limit, (iv) Jeweler's Insurance coverage in an amount of not less than $1,000,000, and (v) Workers Compensation coverage as required by state law. Your policies (other than Workers Compensation) must list us and our affiliates as an additional insured, must include a waiver of subrogation in favor of us and our affiliates, must be primary and non-contributing with any insurance carried by us or our affiliates, and must stipulate that we receive 30 days' prior written notic
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 15–17)
What This Means (2024 FDD)
According to Crown Gold Exchange's 2024 Franchise Disclosure Document, franchisees are required to obtain specific insurance policies that must be primary and non-contributing with any insurance carried by Crown Gold Exchange or its affiliates. This means that in the event of a claim, the franchisee's insurance policies must pay out first, without seeking contribution from any insurance policies held by Crown Gold Exchange. This requirement protects Crown Gold Exchange from liability and ensures that the franchisee bears the initial responsibility for covering potential losses.
The required insurance policies include (i) "Special" causes of loss coverage forms, including fire and extended coverage, crime, vandalism, and malicious mischief, on all property of the Business, for full repair and replacement value (subject to a reasonable deductible); (ii) Business interruption insurance covering at least 12 months of income; (iii) Commercial General Liability insurance, including products liability coverage, and broad form commercial liability coverage, written on an "occurrence" policy form in an amount of not less than $1,000,000 single limit per occurrence and $2,000,000 aggregate limit, (iv) Jeweler's Insurance coverage in an amount of not less than $1,000,000, and (v) Workers Compensation coverage as required by state law.
Furthermore, the franchisee's insurance policies (other than Workers Compensation) must list Crown Gold Exchange and its affiliates as additional insureds and include a waiver of subrogation in favor of them. This provides additional protection to Crown Gold Exchange, allowing them to make claims directly against the franchisee's insurance policies if necessary. The policies must also stipulate that Crown Gold Exchange receive 30 days' prior written notice of cancellation, ensuring that Crown Gold Exchange is informed if the franchisee's insurance coverage is terminated.
This insurance requirement is a standard practice in franchising, as it protects the franchisor's brand and reputation from potential liabilities arising from the franchisee's operations. Prospective Crown Gold Exchange franchisees should carefully review the insurance requirements and associated costs to ensure they can meet these obligations.