What are the obligations of a Degree Wellness franchisee regarding insurance (Item 9), considering the lease and purchase specifications outlined in Item 8?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
MENT SHALL BE INTERPRETED AS DIRECTING OR INFLUENCING SUCH REFERRALS. NONE OF MANAGEMENT COMPANY'S SERVICES HEREUNDER SHALL CONSTITUTE OBLIGATIONS OF MANAGEMENT COMPANY TO GENERATE PATIENTS TO LICENSED PROVIDER.
8. Insurance.
8.1 During the Agreement Term, Licensed Provider must maintain in force, under policies of insurance issued by carriers in good standing in the state where the Premises 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 Studio or otherwise in conjunction with the performance of the Licensed Provider Services 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 providing the Licensed Provider Services, 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. Management Company 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 awards, or other relevant changes in circumstances. Licensed Provider agrees that compliance with any state minimum insurance requirements does not relieve Licensed Provider from the obligation to comply with the contractual insurance requirements in this Agreement.
8.2 Licensed Provider must provide Management Company with 30 days' advance written notice of any material modification, cancellation, or expiration of any policy.
8.3 Deductibles must be in reasonable amounts and are subject to review and written approval by Management Company.
8.4 Licensed Provider's commercial general liability insurance policy must be an "occurrence" policy and must name Management Company, Degree Wellness and their respective owners, directors, employees, agents, and affiliates, as an additional insured on a primary and noncontributory basis.
8.5 The malpractice policy for each doctor providing the Licensed Provider Services and/or working at the Studio must be endorsed, to the fullest extent possible, to name Management Company, Degree Wellness and their respective owners, directors, employees, agents, and affiliates, as an additional insured as an additional insured. If any of these policies are written on a "Claims Made" basis, Licensed Provider agrees to purchase and maintain unlimited tail coverage that shall remain in effect following the termination or expiration of this Agreement and/or such policy.
8.6 In accordance with Management Company's obligations in Section 2.1(i), Management Company will provide Licensed Provider with (i) certificates and copies of additional insured endorsements evidencing the existence of such insurance concurrently with execution of this Agreement and from time to time upon demand of Management Company, and (ii) upon Licensed Provider's request stating the reason therefor (such as a claim has been filed), copies of the insurance policies, along with all applicable endorsements.
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, franchisees, referred to as Licensed Providers, have several insurance obligations. Throughout the agreement term, they must maintain 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. This insurance protects against claims for bodily injury, death, and property damage related to the Studio's operation or the performance of licensed services. Additionally, franchisees must carry worker's compensation and employer's liability insurance as required by law, along with professional liability (malpractice) insurance for each doctor providing services. The malpractice policy should name Management Company, Degree Wellness, and their affiliates as additional insured parties.
Degree Wellness's FDD specifies that the commercial general liability insurance policy must be an "occurrence" policy and must name Management Company, Degree Wellness and their respective owners, directors, employees, agents, and affiliates, as an additional insured on a primary and noncontributory basis. If any policy is written on a "Claims Made" basis, the franchisee must purchase and maintain unlimited tail coverage that remains effective after the agreement terminates. Management Company will provide certificates and copies of additional insured endorsements as evidence of insurance and copies of the insurance policies upon request.
Despite any insurance maintained by Management Company, the franchisee remains responsible for all losses, damages, and contractual liabilities to third parties arising from the operation of the Studio or the performance of licensed services. This includes claims for property damage, injury, illness, or death. The franchisee is also obligated to maintain any insurance coverage required in connection with the lease or purchase of the premises. Degree Wellness emphasizes that its insurance requirements are for its own protection, and franchisees should consult their own insurance advisors to determine appropriate additional coverage. The franchisee's obligation to maintain insurance is not reduced by any separate insurance maintained by Management Company.