Does Desi District require Business Automobile Liability insurance?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
xhibit D).
- B. Insurance. You must obtain insurance as described in the Franchise Agreement and in our Brand Standards Manual, which includes (i) "Special" causes of loss coverage forms, including fire and extended coverage, crime, vandalism, and malicious mischief, on all property of the Business, for full repair and replacement value (subject to a reasonable deductible); (ii) Business interruption insurance covering at least 12 months of income; (iii) Commercial General Liability insurance, including products liability coverage, and broad form commercial liability coverage, written on an "occurrence" policy form in an amount of not less than $1,000,000 single limit per occurrence and $2,000,000 aggregate limit, (iv) Business Automobile Liability insurance including owned, leased, non-owned and hired automobiles coverage in an amount of not less than
$1,000,000, and (v) Workers Compensation coverage as required by state law. Your policies (other than Workers Compensation) must list us and our affiliates as an additional insured, must include a waiver of subrogation in favor of us and our affiliates, must be primary and non-contributing with any insurance carried by us or our affiliates, and must stipulate that we receive 30 days' prior writ
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 26–29)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, franchisees are required to maintain Business Automobile Liability insurance. This insurance must cover owned, leased, non-owned, and hired automobiles. The minimum coverage amount required is $1,000,000.
In addition to the Business Automobile Liability insurance, Desi District franchisees must also carry other types of insurance. These include (i) "Special" causes of loss coverage forms, including fire and extended coverage, crime, vandalism, and malicious mischief, on all property of the Business, for full repair and replacement value (subject to a reasonable deductible); (ii) Business interruption insurance covering at least 12 months of income; (iii) Commercial General Liability insurance, including products liability coverage, and broad form commercial liability coverage, written on an "occurrence" policy form in an amount of not less than $1,000,000 single limit per occurrence and $2,000,000 aggregate limit, and (v) Workers Compensation coverage as required by state law.
The insurance policies, with the exception of Workers Compensation, must list Desi District and its affiliates as additional insured parties. These policies must also include a waiver of subrogation in favor of Desi District and its affiliates. Furthermore, the franchisee's insurance must be primary and non-contributing with any insurance carried by Desi District or its affiliates. Finally, the insurance policies must stipulate that Desi District receives 30 days' prior written notice of cancellation.
These insurance requirements are typical in franchising to protect both the franchisee and the franchisor from potential liabilities. Franchisees should factor in the cost of these insurance policies when evaluating the overall investment required to open and operate a Desi District franchise.