What are the minimum limits for medical professional liability insurance required for a Dermani Medspa franchise?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
(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;
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 minimum limits of $1,000,000 per occurrence and $3,000,000 annual aggregate. This insurance coverage is essential to protect the business against potential claims arising from medical services provided at the medspa.
In addition to the franchisee's insurance requirements, the professional corporation (PC) that operates the Medspa must also obtain and maintain professional liability coverage. This coverage should have limits of at least $1,000,000 for each incident and $3,000,000 annually. The franchisee and Dermani Medspa must be named as additional insured parties on the PC's policy. The franchisee has the option to carry this insurance for their PC, provided that the insurance offers the protections required by Dermani Medspa, as outlined in the Franchise Agreement and the Manuals.
Dermani Medspa retains the right to periodically increase the required coverage amounts or mandate different or additional insurance coverage. These changes may occur due to factors such as inflation, the identification of new risks, changes in laws or liability standards, or higher damage awards. It is important for prospective franchisees to understand that insurance requirements can change over time, potentially leading to increased costs.
Failure to maintain the specified insurance coverage can result in Dermani Medspa obtaining comparable insurance on behalf of the franchisee. In such cases, the franchisee is responsible for reimbursing Dermani Medspa for all premiums, costs, and expenses incurred, along with a 10% administrative fee. This underscores the importance of adhering to the insurance requirements to avoid additional financial burdens and potential breaches of the franchise agreement.