What kind of insurance is Fly To Fit required to obtain?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
cific Obligations
The following are our current specific obligations for purchases and leases:
- A. Real Estate. Your business location is subject to our approval and must meet our specifications. You must use reasonable efforts to have your landlord sign our form of Rider to Lease Agreement (attached to this disclosure document as Exhibit D).
- B. Insurance. You must obtain insurance as described in the Franchise Agreement and in our Brand Standards Manual, which includes (i) "Special" causes of loss coverage forms, including fire and extended coverage, crime, vandalism, and malicious mischief, on all property of the Business, for full repair and replacement value (subject to a reasonable deductible); (ii) Business interruption insurance covering at least 12 months of income; (iii) Commercial General Liability insurance, including products liability coverage, and broad form commercial liability coverage, written on an "occurrence" policy form in an amount of not less than $1,000,000 single limit per occurrence and $2,000,000 aggregate limit, (iv) Business Automobile Liability insurance including owned, leased, non-owned and hired automobiles coverage in an amount of not less than $1,000,000, and (v) Workers Compensation coverage as required by state law.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–21)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, franchisees are required to obtain several types of insurance coverage. These include "Special" causes of loss coverage, which covers fire, extended coverage, crime, vandalism, and malicious mischief, on all business property for its full repair and replacement value, subject to a reasonable deductible. Franchisees must also secure business interruption insurance covering at least 12 months of income.
Fly To Fit franchisees must also maintain Commercial General Liability insurance, including products liability coverage and broad form commercial liability coverage, written on an "occurrence" policy form with a minimum of $1,000,000 single limit per occurrence and $2,000,000 aggregate limit. Additionally, they need Business Automobile Liability insurance covering owned, leased, non-owned, and hired automobiles with a limit of not less than $1,000,000. Finally, franchisees are required to have Workers Compensation coverage as mandated by state law.
The insurance policies, excluding Workers Compensation, must list Fly To Fit and its affiliates as additional insured parties and include a waiver of subrogation in their favor. These policies must be primary and non-contributing with any insurance held by Fly To Fit or its affiliates. Furthermore, the insurance provider must give Fly To Fit 30 days' prior written notice of any policy cancellation. This ensures Fly To Fit is protected from potential liabilities and maintains oversight of franchisee compliance with insurance requirements, which is a common practice in franchising to protect the brand and the network.