What rating must the insurance carriers used by Expense Reduction Analysts franchisees have?
Expense_Reduction_Analysts Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) You must buy insurance only from reputable carriers rated A-VIII or better by A.M. Best and Company, Inc. (or similar criteria as Franchisor periodically specifies), unless the Franchisor designates specific carriers from which You must purchase coverage (in which case You may only purchase from the designated carrier(s)). The Franchisor may periodically increase the amounts of coverage required under these insurance policies and/or require different or additional insurance coverage to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards, changing economic conditions, or other relevant changes in circumstances such as cyber liability and workers comp liability. All insurance policies You purchase must name the Franchisor and any affiliate the Franchisor designates as additional insureds and provide for thirty (30) days' prior written notice to the Franchisor of a policy's material modification or cancellation, and provide us with a copy of the proof of insurance by submitting a Certificate of Insurance ("COI") prior to operating your Consulting Business. The cost of Your premiums will depend on the insurance carrier's charges, terms of payment, and Your insurance and payment histories. You shall make timely delivery of certificates of all required insurance to the Franchisor, each of which shall contain a statement by the insurer that the policy will not be cancelled or materially altered without at least thirty
Source: Item 23 — RECEIPTS (FDD pages 58–215)
What This Means (2025 FDD)
According to Expense Reduction Analysts' 2025 Franchise Disclosure Document, franchisees must secure insurance policies from reputable carriers. These carriers must have a rating of A-VIII or better from A.M. Best and Company, Inc. or meet similar criteria specified by Expense Reduction Analysts periodically.
This requirement ensures that franchisees are working with financially stable and reliable insurance providers. It protects both the franchisee and Expense Reduction Analysts from potential losses due to underfunded or unstable insurance companies.
Expense Reduction Analysts retains the right to designate specific insurance carriers from which franchisees must purchase coverage, potentially streamlining the insurance process but also limiting franchisee choice. The franchisor may also periodically increase the required coverage amounts or require different or additional insurance coverage to reflect changes in risks, laws, or economic conditions.
It is important for prospective Expense Reduction Analysts franchisees to factor in the cost of insurance from approved carriers when assessing the overall financial investment. Franchisees should also stay informed about any changes to insurance requirements or designated carriers to maintain compliance with the franchise agreement.