Who must be named as additional named insureds on each insurance policy for an Extreme Art Studio?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
Each insurance policy must name us and any affiliates we designate as additional named insureds and provide for 30 days' prior written notice to us before the cancellation, expiration or material change of the policy. Each insurance policy must contain a waiver of all subrogation rights against us, our affiliates, and their successors and assigns. Prior to commencing any renovations or construction at the Extreme Art Studio Business, you will provide us with a certificate of insurance for the builder's risk insurance required. You must furnish us copies of your certificates of insurance or other evidence of your maintaining this insurance coverage and paying premiums at least 30 days prior to opening, and as we may routinely request. You must immediately notify us in writing of any accidents, injury, occurrence or claim that might give rise to a liability or claim against us or which could materially affect your Extreme Art Studio Business, and such notice must be provided no later than the date you notify your insurance carrier.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 23–26)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, each insurance policy must name Extreme Art Studio and any affiliates that Extreme Art Studio designates as additional named insureds. Additionally, the insurance policy must provide for 30 days' prior written notice to Extreme Art Studio before the cancellation, expiration, or material change of the policy. Each policy must also contain a waiver of all subrogation rights against Extreme Art Studio, its affiliates, and their successors and assigns.
This requirement ensures that Extreme Art Studio has protection under the franchisee's insurance policies, mitigating potential risks and liabilities. It also allows Extreme Art Studio to monitor the franchisee's insurance coverage and receive timely notification of any changes or cancellations, ensuring continuous coverage.
In addition to naming Extreme Art Studio as an additional insured, franchisees must also provide a certificate of insurance for builder's risk insurance before commencing any renovations or construction at the Extreme Art Studio Business. Franchisees must also furnish copies of their certificates of insurance or other evidence of maintaining insurance coverage and paying premiums at least 30 days prior to opening, and as Extreme Art Studio may routinely request. Franchisees must also immediately notify Extreme Art Studio in writing of any accidents, injury, occurrence or claim that might give rise to a liability or claim against them or which could materially affect their Extreme Art Studio Business, and such notice must be provided no later than the date they notify their insurance carrier.
These insurance requirements are typical in franchising, as they protect the franchisor's brand and reputation from potential liabilities arising from the franchisee's operations. Prospective franchisees should carefully review the insurance requirements and ensure they can obtain the necessary coverage at a reasonable cost.