What are the minimum coverage limits for medical professional liability insurance required for a Dermani Medspa franchise?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
insurance with minimum employers' liability limits of One Million Dollars ($1,000,000) each accident, as well as such other disability benefits type insurance as may be required by statute or rule of the state in which the Medspa is located;
- (e) umbrella liability insurance with minimum limits of Two Million Dollars ($2,000,000) per occurrence and annual aggregate;
- (f) medical professional liability insurance with minimum limits of One Million Dollars ($1,000,000) per occurrence and Three Million Dollars ($3,000,000) annual aggregate;
- (g) property insurance providing coverage for direct physical loss or damage to real and personal property for all risk perils, including the perils of flood and earthquake, with minimum limits of Two Hundred Thousand Dollars ($200,000); and
- (h) any insurance required by the terms of your lease or that we may require in the future.
- 8.6.3. In addition, you must arrange for the PC to obtain and maintain professional liability coverage with limits of at least One Million Dollars ($1,000,000) for each incident and Three Million Dollars ($3,000,000) annually for itself and naming you and us as an additional insured. You may also carry this insurance for your PC if the insurance provides the protections required by us, under this Agreement and in the Manuals.
- 8.6.4. We may periodically increase the amounts of coverage required under these insurance policies and/or require different or additional insurance coverage at any time to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards or other relevant changes in circumstances.
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, franchisees are required to maintain medical professional liability insurance with specific minimum coverage limits. The policy must provide at least $1,000,000 per occurrence and $3,000,000 annual aggregate. This insurance coverage is crucial for protecting the business against potential claims arising from medical services provided at the medspa.
In addition to the franchisee's coverage, the professional corporation (PC) that operates the Medspa must also maintain its own professional liability coverage. This coverage must also have limits of at least $1,000,000 for each incident and $3,000,000 annually. The franchisee and Dermani Medspa Franchising LLC must be named as additional insureds on the PC's policy. This dual coverage approach ensures comprehensive protection for both the franchisee and the franchisor.
Dermani Medspa retains the right to increase the required coverage amounts or require different or additional insurance coverage at any time. This adjustment can occur to reflect factors such as inflation, the identification of new risks, changes in laws or liability standards, or higher damage awards. Franchisees must provide Dermani Medspa with thirty days' prior written notice of any material modification, cancellation, or expiration of their insurance policies. Franchisees must also routinely furnish copies of their certificates of insurance to Dermani Medspa to demonstrate compliance and premium payment. Failure to maintain the required insurance can result in Dermani Medspa obtaining insurance on the franchisee's behalf, with the franchisee responsible for reimbursing all premiums, costs, and expenses, plus a 10% administrative fee.