What are the minimum liability limits required per occurrence for professional liability (malpractice) insurance for each doctor practicing in a Degree Wellness franchise?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
may have, you agree to pay the employee's current or former employer twice the employee's annual salary, plus all costs and attorneys' fees incurred as a result of the violation. This amount is set at twice the employee's annual salary because it is a reasonable estimation of the damages that would occur from such a breach, and it will almost certainly be impossible to calculate precisely the actual damages from such a breach.)
10.8 Insurance
a. Before you open the Franchise and during any Term of this Agreement, you must maintain in force, under policies of insurance issued by carriers in good standing in the state where your Studio is located: (1) comprehensive commercial general liability and motor vehicle liability insurance against claims for bodily and personal injury, death and property damage caused by or occurring in conjunction with the operation of the Franchise or otherwise in conjunction with your conduct of the Franchise business pursuant to this Agreement, under one or more policies of 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
statute; (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. We may periodically increase or decrease the amounts of coverage required under these insurance policies, and/or require different or additional kinds of insurance, including excess liability insurance, to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awa
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, franchisees are required to maintain professional liability (malpractice) insurance for each doctor practicing in their franchise business. The minimum liability coverage must be no less than $1,000,000 per occurrence and $3,000,000 in the aggregate. This insurance coverage must be in force before the franchise opens and must be maintained throughout the term of the Franchise Agreement.
Degree Wellness also stipulates that the malpractice policy for each doctor working in the franchise must name Degree Wellness (and, if requested, their members, directors, employees, agents, and affiliates) as an additional insured. If the policy is written on a "Claims Made" basis, the franchisee must purchase and maintain unlimited tail coverage that remains effective after the termination or expiration of the Franchise Agreement and/or the policy.
The franchisor retains the right to periodically adjust the required coverage amounts to reflect inflation, new risks, changes in law, or other relevant circumstances. Franchisees must provide Degree Wellness with certificates and copies of additional insured endorsements as proof of insurance coverage, both at the execution of the agreement and upon each subsequent renewal date. Failure to maintain the required insurance coverage allows Degree Wellness to obtain coverage on the franchisee's behalf, with the franchisee responsible for reimbursing all associated costs and premiums.
It is important for prospective Degree Wellness franchisees to consult with their own insurance agents, brokers, and attorneys to determine the types and levels of insurance protection they may need or desire, in addition to the minimum requirements specified by Degree Wellness. Compliance with state minimum insurance requirements does not relieve the franchisee from meeting the contractual insurance obligations outlined in the Franchise Agreement.