What rating must the insurance issuer have to be approved for Dermani Medspa franchisees?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
Under the Franchise Agreement, you must obtain and maintain the insurance coverages and policies that we prescribe in the Manuals. Each insurance policy must be issued by an issuer we approve, who must have a rating of at least "A" in the most recent Key Rating Guide published by the A.M. Best Company (or another rating that we reasonably designate if A.M. Best Company no longer publishes the Key Rating Guide) and must be licensed to do business in the state in which the dermani MEDSPA® is located. In addition, you must arrange for the PC to obtain and maintain professional liability coverage. All liability and property damage policies must name us (dermani MEDSPA® Franchising LLC) and our parent company (LazCoz, LLC) as additional insureds and must provide that each policy cannot be cancelled unless we are given 30 days' prior written notice. We may periodically increase required coverage limits or require additional or different coverage to reflect inflation, identification of new risks, changes in the law or standards of liability, higher damage awards and other relevant changes in circumstances. You must deliver to us (and in the future maintain on file with us) valid and current certificates of insurance showing that all required insurance is in full force and effect.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 26–28)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, franchisees must secure insurance policies from issuers that meet specific criteria. To be approved by Dermani Medspa, the insurance provider must have a rating of at least "A" in the most recent Key Rating Guide published by A.M. Best Company. If A.M. Best Company stops publishing this guide, Dermani Medspa can designate another rating system. Additionally, the insurance issuer must be licensed to conduct business in the state where the Dermani Medspa franchise is located.
This requirement ensures that franchisees obtain insurance coverage from reputable and financially stable providers. It also mandates that Dermani Medspa Franchising LLC and its parent company, LazCoz, LLC, are named as additional insureds on all liability and property damage policies. This protects the franchisor from potential liabilities and ensures they receive 30 days' prior written notice if a policy is canceled.
Dermani Medspa retains the right to periodically increase required coverage limits or mandate additional coverage to reflect factors like inflation, new risks, changes in the law, or higher damage awards. Franchisees must provide and maintain valid certificates of insurance to demonstrate compliance with these requirements. This ongoing monitoring helps maintain adequate protection for both the franchisee and the franchisor.
In the franchise industry, it is common for franchisors to set minimum insurance standards to protect their brand and the entire franchise system. Dermani Medspa's specific requirement of an "A" rating from A.M. Best Company is a relatively stringent standard, indicating a focus on financial stability and reliability in insurance coverage.