Does compliance with state minimum insurance requirements relieve a Degree Wellness Licensed Provider from the obligation to comply with the contractual insurance requirements in the Agreement?

According to Degree Wellness's 2025 Franchise Disclosure Document, compliance with state minimum insurance requirements does not relieve a Licensed Provider from the obligation to comply with the contractual insurance requirements outlined in the agreement. This means that even if a Licensed Provider meets the minimum insurance levels mandated by the state where their Premises is located, they must still adhere to the specific insurance requirements detailed in their agreement with the Management Company.

The insurance requirements include maintaining comprehensive commercial general liability and motor vehicle liability insurance with minimum coverage of $1,000,000 per occurrence and $3,000,000 in the aggregate. Additionally, worker's compensation and employer's liability insurance as required by law, and professional liability (malpractice) insurance for each doctor providing services, with limits of not less than $1,000,000 per occurrence and $3,000,000 in the aggregate, are required. The Management Company retains the right to periodically adjust these coverage amounts or require different or additional kinds of insurance to reflect changes in circumstances such as inflation or new risks.

This requirement ensures that Degree Wellness and its affiliates are adequately protected beyond the state minimums, reflecting the specific risks associated with the Degree Wellness business model. It is the Licensed Provider's responsibility to understand and meet these contractual obligations, regardless of state regulations. The Licensed Provider must also name Management Company, Degree Wellness and their respective owners, directors, employees, agents, and affiliates, as an additional insured on a primary and noncontributory basis on their commercial general liability insurance policy and malpractice policy.

Prospective franchisees should carefully review the insurance section of the agreement and consult with their own insurance advisors to ensure they can meet these requirements. Failure to maintain the required insurance coverage could result in a breach of the agreement and potential liabilities for the Licensed Provider.