What is the minimum commercial general liability insurance coverage a Fly Fitness franchisee must maintain?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
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Before you open for business, you must purchase and maintain the minimum insurance coverage that we specify. This includes commercial general liability insurance, including coverage for professional liability and sexual abuse of at least $1 million per occurrence and $3 million aggregate; worker's compensation coverage in the limits required by the state in which the Franchised Business is located; business interruption insurance; property insurance for the full replacement value of furniture, fixtures, equipment, vehicles, inventory, and leasehold improvements or $50,000, whichever is greater; and comprehensive automobile insurance of $1 million for any vehicle operated on behalf of the Franchised Business. Each policy must be written by a responsible carrier or carriers acceptable to us and must name us and our respective officers, directors, partners, agents, and employees as additional insured parties, as their interests may appear. We reserve the right to require additional types of insurance and coverage as prov
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 18–20)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, franchisees are required to maintain a minimum level of insurance coverage, including commercial general liability insurance. This insurance must include coverage for professional liability and sexual abuse, with a minimum of $1 million per occurrence and $3 million in aggregate coverage. This requirement ensures that Fly Fitness franchisees have adequate financial protection against potential lawsuits or claims arising from their business operations.
In addition to commercial general liability insurance, Fly Fitness franchisees must also maintain worker's compensation coverage, business interruption insurance, property insurance, and comprehensive automobile insurance. The worker's compensation coverage must be in the limits required by the state in which the franchised business is located. Property insurance must cover the full replacement value of furniture, fixtures, equipment, vehicles, inventory, and leasehold improvements, or $50,000, whichever is greater. Comprehensive automobile insurance of $1 million is required for any vehicle operated on behalf of the franchised business.
All insurance policies must be written by a responsible carrier acceptable to Fly Fitness and must name Fly Fitness and its officers, directors, partners, agents, and employees as additional insured parties. Fly Fitness reserves the right to require additional types of insurance and coverage as provided in the Franchise Agreement. This comprehensive insurance requirement is typical in franchising to protect both the franchisee and the franchisor from potential liabilities and financial losses.