Is Engel & Volkers required to be named as an additional insured on the franchisee's insurance policies?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 18.2 Franchisor shall be named as an additional insured on all such policy or policies described in Section 18.1 above.
Franchisee must provide proof of the foregoing insurance coverage within thirty (30) days of the Effective Date and continue to prove its maintenance to Franchisor by furnishing to Franchisor annually upon Franchisor's request, the then current certificates of insurance coverage.
Franchisee shall provide Franchisor with certificates of insurance issued by each of the insurers indicating that all required insurance is in full force and effect and that it will not be terminated, permitted to lapse, expire or change without at least thirty (30) days' prior written notice to Franchisor.
Franchisor will offer Franchisee the opportunity to benefit from the favorable insurance terms granted to ENGEL & VÖLKERS System franchisees under its pool insurance arrangements, if any.
- 18.3 Franchisor does not represent or warrant that any insurance that Franchisee is required to purchase, or which Franchisor procures on Franchisee's behalf, will provide adequate coverage for Franchisee.
Franchisee should consult with its own insurance agents, brokers, attorneys or other insurance advisors to determine the level of insurance protection it needs and desires, in addition to the coverage and limits required by Franchisor.
Franchisor's
review and verification of certain elements of Franchisee's insurance does not in any way reduce or eliminate Franchisee's obligations to fully comply with all insurance requirements. It is Franchisee's sole obligation to fully comply with these insurance requirements and it is Franchisee's sole obligation to confirm with its insurance providers that its policies are in compliance.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, Engel & Volkers must be named as an additional insured on all insurance policies that the franchisee is required to maintain. This requirement is designed to protect Engel & Volkers from potential liabilities arising from the franchisee's operations.
The franchisee is obligated to provide proof of insurance coverage within 30 days of the effective date of the franchise agreement. Annually, upon Engel & Volkers's request, the franchisee must furnish current certificates of insurance coverage to demonstrate continued compliance. Additionally, the franchisee must ensure that Engel & Volkers receives at least 30 days' prior written notice if any of the required insurance policies are terminated, allowed to lapse, expire, or undergo changes.
Engel & Volkers may offer franchisees the opportunity to participate in its pool insurance arrangements, which could provide favorable insurance terms. However, Engel & Volkers explicitly states that it does not guarantee the adequacy of the insurance coverage, whether purchased by the franchisee or procured by Engel & Volkers on the franchisee's behalf. Therefore, franchisees are advised to consult with their own insurance advisors to determine the appropriate level of coverage needed beyond the minimum requirements set by Engel & Volkers.
The FDD emphasizes that it is the franchisee's sole responsibility to ensure full compliance with all insurance requirements and to confirm with their insurance providers that their policies meet these requirements. Engel & Volkers's review and verification of certain insurance elements does not diminish the franchisee's obligation to maintain adequate and compliant insurance coverage.