When must Deka Lash franchisees send certificates of insurance to the franchisor?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
Area Developers must maintain insurance as required under their individual franchise agreements for Franchised Businesses to be open within the Development Area.
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, franchisees must provide certificates of insurance to Deka Lash upon the annual expiration date of their insurance policies. Franchisees are required to maintain several insurance policies, protecting both the franchisee and Deka Lash as an additional insured.
The required insurance policies must be written by an insurance company with an A.M. Best rating of "A" or better. The minimum coverage includes Commercial General Liability ($1,000,000 per occurrence, $2,000,000 annual aggregate), Rented Premise and Fire Legal Liability ($250,000), and Automobile coverage ($1,000,000 for owned, non-owned, and hired vehicles). Additionally, Workers' Compensation/Employers Liability coverage is required as mandated by statute, with $500,000 of employer's liability limits.
It is standard practice in franchising for franchisors to require franchisees to maintain adequate insurance coverage to protect both parties from potential liabilities. The specific coverage amounts and types may vary depending on the industry and the nature of the business. Franchisees should ensure they understand these requirements and factor the costs of insurance into their overall business plan. Area Developers must also maintain insurance as required under their individual franchise agreements for Franchised Businesses to be open within the Development Area.