Are Deka Lash Area Developers required to maintain insurance?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
Area Developers must maintain insurance as required under their individual franchise agreements for Franchised Businesses to be open within the Development Area.
Insurance. You must maintain insurance policies protecting you and us (as additional insured). The policies must be written by an A.M. Best "A" or better rated insurance company and must include the following types and minimum amounts of coverage, as well as any other insurance as required in the Operations Manual and any other insurance as may be required by state law.
Commercial General Liability: Coverage including bodily injury, property damage, and personal injury. Per occurrence $1,000,000, annual policy aggregate of $2,000,000.
Rented Premise and Fire Legal Liability: Coverage of $250,000.
Automobile: Coverage for all owned, non-owned and hired vehicles of $1,000,000 for uninsured and underinsured motorist, bodily injury and property damage. Must include statutory personal injury protection per individual state requirements.
Workers' Compensation/Employers Liability: As required by statute, workers' compensation coverage for employees and all owner(s) of $500,000 of employer's liability limits of protection.
You must name DL Franchising, LLC and their respective affiliates, officers, directors, members and agents and others as their interest may appear on a primary, noncontributory basis as an additional insured on these policies and send proof of the same to us. Certificates of insurance must be sent in upon the annual expiration date.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 27–30)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, Area Developers are required to maintain insurance. Specifically, Area Developers must maintain insurance as required under their individual franchise agreements for Franchised Businesses to be open within the Development Area.
In addition to Area Developers, franchisees must maintain insurance policies protecting themselves and Deka Lash (as additional insured). These policies must be written by an A.M. Best "A" or better rated insurance company. The required coverage includes Commercial General Liability with per occurrence coverage of $1,000,000 and an annual policy aggregate of $2,000,000, Rented Premise and Fire Legal Liability coverage of $250,000, and Automobile coverage of $1,000,000 for owned, non-owned, and hired vehicles. Workers' Compensation/Employers Liability coverage is also required as mandated by statute, including $500,000 of employer's liability limits of protection.
Franchisees must name DL Franchising, LLC and their respective affiliates, officers, directors, members, and agents as additional insured on these policies on a primary, noncontributory basis. Certificates of insurance must be provided upon the annual expiration date. This ensures that both the franchisee and Deka Lash are protected against potential liabilities and claims, which is a common practice in franchising to mitigate risks and ensure business continuity.