Can the Epcon Communities franchisor specify different amounts of coverage and self-insurance for the franchisee's insurance?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
on, inquiry, claim or demand. Franchisor shall have the right to resist and defend itself in and/or against any such action, suit, proceeding, investigation, inquiry, claim or demand, and, upon receipt of written notice from Franchisor of the amount expended by Franchisor in such defense, Franchisee shall, within ten business days of such receipt, reimburse Franchisor in full for the total amount of such expenses.
- 16.2 Franchisee shall at all times during the term of this Agreement, and at its own expense, keep in force by advance payment of premium general liability insurance in an amount not less than One Million Dollars ($1,000,000.00) per occurrence and in the amount of not less than Two Million Dollars ($2,000,000.00) per Project annual aggregate, arising out of a single accident, and with a deductible or self-insured retention on any such policy of not greater than One Thousand Dollars ($1,000.00), or such other amounts of coverage and self-insurance as Franchisor may specify from time to time, insuring Franchisee against any liability that may accrue by reason of the development by Franchisee of Project(s). Such policy shall include coverage for liability arising from premises-operations, independent contractors and products-completed operations. The policy shall not contain any restrictive endorsements or policy language which excludes coverage for residential construction, work performed by subcontractors on your behalf, or liability assumed under construction contracts. The policy shall name Epcon Communities Franchising, LLC as an additional insured, using ISO Additional Insured Endorsement CG2029 (04-13 or 12-19) or its equivalent which provides premises and completed operations coverage. Franchisee shall carry workers compensation insurance including an employer's liability limit of $500,000, and commercial auto liability (primary) providing limits of at least $1,000,000.00 each occurrence, combined single limits or in such other amounts and terms of coverage as Franchisor may specify from time to time. Franchisee shall also carry Umbrella/Excess Liability Insurance written on an "occurrence," not a "claimsmade" basis, providing coverage excess of the underlying employer's liability, commercial general liability, and commercial automobile liability insurance, on terms at least as broad as the underlying coverage, with limits of not less than $5,000,000 per occurrence and in the annual aggregate. Franchisee shall also carry such other types of coverages, under such terms of coverage, as Franchisor may specify from time to time.
- 16.3 All policies of insurance to be maintained by Franchisee shall name the Franchisee and all Project entities as named insureds and contain a separate endorsement naming Franchisor as an additional insured. All insurance shall be placed with an insurance carrier or carriers with an A.M. Best's rating of "A-" or better and an A.M. Best's Class rating of "x" or better, duly licensed in the state in which the Project is located, or be otherwise approved in writing by Franchisor. All policies of insurance and the certificates evidencing the coverages thereunder shall expressly provide that they shall not be subject to cancellation, material alteration or non-renewal except upon thirty (30) days written notice to Franchisor. At
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to Epcon Communities' 2025 Franchise Disclosure Document, Epcon Communities has the right to specify different amounts of coverage and self-insurance for its franchisees. Specifically, franchisees must maintain general liability insurance of at least $1,000,000 per occurrence and $2,000,000 per project annual aggregate, with a deductible or self-insured retention of no more than $1,000. However, Epcon Communities can specify other coverage amounts and self-insurance levels from time to time.
In addition to general liability insurance, franchisees must also carry workers compensation insurance with an employer's liability limit of $500,000 and commercial auto liability insurance with limits of at least $1,000,000 per occurrence. Again, Epcon Communities retains the right to specify different amounts and terms of coverage for these policies as well. Franchisees are also required to maintain Umbrella/Excess Liability Insurance with limits of not less than $5,000,000 per occurrence and in the annual aggregate.
Epcon Communities also has the right to specify other types of coverages and terms of coverage that franchisees must carry. All insurance policies must name the franchisee and all project entities as named insureds and include an endorsement naming Epcon Communities as an additional insured. The insurance must be placed with carriers having an A.M. Best's rating of "A-" or better and a Class rating of "x" or better, and the policies must provide thirty days' written notice to Epcon Communities before cancellation or material alteration. Franchisees must provide certificates of insurance to Epcon Communities at least thirty days before the expiration of any policy and keep copies of all policies on deposit with Epcon Communities.