Are the insurance policies for an Endless Summer Sweets franchise required to be primary and non-contributing?

According to Endless Summer Sweets's 2024 Franchise Disclosure Document, the insurance policies franchisees are required to obtain must be primary and non-contributing with any insurance carried by Endless Summer Sweets or its affiliates. This means that in the event of a claim, the franchisee's insurance policy must pay out first, and Endless Summer Sweets's insurance will not contribute to the payment.

Endless Summer Sweets requires franchisees to obtain several types of insurance coverage. 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, (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.

In addition to being primary and non-contributing, the franchisee's insurance policies (other than Workers Compensation) must list Endless Summer Sweets and its affiliates as additional insureds and include a waiver of subrogation in favor of Endless Summer Sweets and its affiliates. The policies must also stipulate that Endless Summer Sweets receive 30 days' prior written notice of cancellation. These requirements protect Endless Summer Sweets from potential liabilities and ensure they are informed of any changes to the franchisee's insurance coverage.