Can Epcon Communities specify different amounts of coverage and self-insurance for the franchisee's insurance policies?
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.
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 the franchisee's insurance policies. Specifically, the franchisee 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 retains the right to specify other coverage amounts and self-insurance levels from time to time.
In addition to general liability insurance, the franchisee is required to carry worker's compensation insurance, including 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 can specify different amounts and terms of coverage for these policies as well.
Furthermore, franchisees must also carry Umbrella/Excess Liability Insurance with limits of not less than $5,000,000 per occurrence and in the annual aggregate. The franchisee must also carry other types of coverages under terms that Epcon Communities may specify from time to time. All insurance policies must name the franchisee and all project entities as named insureds, and Epcon Communities as an additional insured. The policies must be placed with an insurance carrier having an A.M. Best's rating of "A-" or better and an A.M. Best's Class rating of "x" or better.