According to Hydrodog's 2025 Franchise Disclosure Document, franchisees are required to maintain animal bailee insurance coverage of $5,000. This insurance is part of a broader set of insurance requirements that Hydrodog mandates for its franchisees. In addition to animal bailee coverage, franchisees must also carry general liability insurance ($1,000,000/$2,000,000) with pet groomer professional liability coverage, commercial automobile insurance ($1,000,000) with uninsured motorist coverage for the HydroDog Vehicle, and Worker's Compensation where necessary.

The animal bailee insurance specifically covers situations where the franchisee is responsible for the care, custody, or control of an animal. This type of insurance is crucial for a business like Hydrodog, which involves grooming and handling pets, as it protects against potential claims arising from injury, loss, or damage to animals in the franchisee's care. The specific amount of coverage required reflects Hydrodog's assessment of the potential risks involved in operating a mobile pet grooming business.

Hydrodog also stipulates that all insurance policies, except workers' compensation and commercial property liability, must include a provision naming Hydrodog and its related entities as additional insured. Furthermore, the insurance companies providing the coverage must have a rating of A-VIII or better in the most recent A.M. Best's Insurance Report, with an exception for Workers' Compensation policies, which can be issued by companies with a B+ or better rating. These requirements ensure that franchisees obtain coverage from reputable and financially stable insurers, providing an additional layer of protection for both the franchisee and Hydrodog. Franchisees should carefully review these insurance requirements and factor the costs into their overall investment and operating expenses.