What is the minimum aggregate liability coverage required for comprehensive commercial general liability and motor vehicle liability insurance for Degree Wellness?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
which we or our affiliates are approved suppliers (see below).
You must obtain and maintain, at your own expense, the insurance coverage that we periodically require and satisfy other insurance-related obligations. You must purchase (1) comprehensive commercial general liability and motor vehicle liability insurance containing minimum liability coverage of not less than $1,000,000 per occurrence and $3,000,000 in the aggregate, (2) worker's compensation and employer's liability insurance as required by law, with limits equal to or in excess of those required by law, (3) professional liability (malpractice) insurance, for each doctor practicing in your Franchise business, having limits of not less than
$1,000,000 per occurrence and $3,000,000 in the aggregate and (4) any other insurance required by applicable law, rule, regulation, ordinance or licensing requirements. Deductibles must be in reasonable amounts and are subject to review and written approval by us. Your commercial general liability insurance policy must be an "occurrence" policy. If any policy is written on a "Claims Made" basis, you must purchase and maintain unlimited tail coverage that shall remain in effect following the termination or expiration of the Franchise Agreement and/or such policy. All commercial general liability insurance and professional liability (malpractice) insurance policies you purchase must name us (and, if we so request, our members, directors, employees, agents, and affiliates) as additional insureds. If you fail to obtain or maintain the insurance we specify, we may (but need not) obtain the insurance for you and the Studio on your behalf (see Item 6). You should consult with your own insurance agents, brokers, and attorneys to determine what types of coverages and what level of insurance protection you may need or desire, in addition to the coverages and minimum limits specified by us. The cost of your premiums will depend on the insurance carrier's char
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 26–29)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, franchisees must secure and maintain comprehensive commercial general liability and motor vehicle liability insurance. The minimum liability coverage required is $1,000,000 per occurrence and $3,000,000 in the aggregate. Additionally, franchisees must obtain worker's compensation and employer's liability insurance as mandated by law, along with professional liability (malpractice) insurance for each practicing doctor, also with limits of not less than $1,000,000 per occurrence and $3,000,000 in the aggregate.
The FDD stipulates that deductibles must be reasonable and receive written approval from Degree Wellness. The commercial general liability insurance policy must be an "occurrence" policy. If a "Claims Made" policy is used, unlimited tail coverage must be maintained even after the franchise agreement terminates. Degree Wellness, along with its members, directors, employees, agents, and affiliates, must be named as additional insureds on the commercial general liability and professional liability policies.
If a franchisee fails to maintain the specified insurance, Degree Wellness has the option, but not the obligation, to obtain the necessary insurance on behalf of the franchisee, as detailed in Item 6 of the FDD. The document advises franchisees to consult with their own insurance professionals to determine appropriate coverage types and levels beyond the minimums required by Degree Wellness. The cost of premiums will vary based on the insurance carrier's charges, payment terms, and the franchisee's insurance and payment history.
This requirement ensures that Degree Wellness franchisees have adequate financial protection against potential liabilities, safeguarding both the franchisee's business and the franchisor's brand. Prospective franchisees should factor these insurance costs into their initial investment and ongoing operating expenses. It is also important to understand the implications of occurrence-based versus claims-made policies and the necessity of tail coverage to avoid gaps in protection.