What publication is used to determine the insurance company's rating for an Extreme Art Studio franchise?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
- 8.6.4 These insurance policies must be purchased from licensed insurers having a rating of "A/VIII" or higher by the then-current edition of Best Insurance Reports published by A.M. Best Company (or other similar publication or criteria we designate).
The insurance company must be authorized to do business in the state where your Extreme Art Studio Business is located and must be approved by us.
- 8.6.5 Each insurance policy (except for employment liability insurance policies) must name us and any affiliates we designate as additional named insureds and provide for 30 days' prior written notice to us of a policy's material modification, cancellation, or expiration.
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.
- 8.6.6 You must furnish us with 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, as week as routinely as requested by us.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, the insurance policies franchisees obtain must be purchased from licensed insurers with a rating of "A/VIII" or higher. This rating is determined by the then-current edition of Best Insurance Reports published by A.M. Best Company. Extreme Art Studio retains the right to designate another similar publication or criteria for assessing insurance company ratings.
This requirement ensures that franchisees are using reputable and financially stable insurance providers, which protects both the franchisee and Extreme Art Studio from potential losses. The "A/VIII" rating indicates a strong financial standing and ability to pay claims.
Extreme Art Studio also requires that the insurance company be authorized to conduct business in the state where the franchisee's Extreme Art Studio Business is located and must be approved by them. This ensures compliance with local regulations and allows Extreme Art Studio to have oversight over the insurance coverage obtained by its franchisees. Franchisees must provide copies of their insurance certificates to Extreme Art Studio at least 30 days before opening and routinely as requested, demonstrating they have secured the required coverage and are maintaining premium payments.