What is the minimum required amount of umbrella liability insurance for a Hyper Kidz franchise?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
overage specified by us in this Agreement and in the Operations Manual. All policies must be written by a responsible carrier or carriers that we determine to be acceptable, that are rated at least "A" with A.M. Best, and that are licensed to do business in the state in which your Hyper Kidz Business is located. You acknowledge and understand that we have the right to change our insurance requirements, and you shall comply with such changes. As of the date of this Agreement, our current insurance requirements include:
- (a) public/general liability insurance, including child molestation coverage, in the amount of One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) aggregate, and Two Hundred Fifty Thousand Dollars ($250,000) damage to rented premises per occurrence;
- (b) umbrella liability insurance in the amount of One Million Dollars ($1,000,000);
- (c) personal and advertising injury coverage with limits of One Million Dollars ($1,000,000) per occurrence and Ten Thousand Dollars ($10,000) per person medical benefits;
- (d) products/completed operations coverage of One Million Dollars ($1,000,000) aggregate;
- (e) property damage insurance including all perils coverage to personal property with a minimum amount of Four Hundred Thousand Dollars ($400,000);
- (f
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, franchisees are required to maintain umbrella liability insurance in the amount of $1,000,000. This insurance coverage is one of several policies Hyper Kidz requires franchisees to secure and maintain throughout the term of their Franchise Agreement.
In addition to umbrella liability insurance, Hyper Kidz also mandates that franchisees carry public/general liability insurance, personal and advertising injury coverage, products/completed operations coverage, property damage insurance, automobile insurance, business interruption insurance, and money and securities insurance. The specific amounts and terms for these other insurance types are detailed in the FDD, and Hyper Kidz retains the right to modify these insurance requirements over time.
It is important to note that all insurance policies must be issued by licensed insurers approved by Hyper Kidz, with a minimum rating of "A" from A.M. Best. Furthermore, none of the franchisee's insurance policies can have a deductible greater than $1,000. Franchisees must also ensure that Hyper Kidz and its affiliates are named as additional insureds on the policies and that the policies include a waiver of subrogation rights against them. Failing to maintain the required insurance coverage can result in Hyper Kidz obtaining coverage on the franchisee's behalf, with the franchisee responsible for all costs and a 10% administrative fee, or even termination of the Franchise Agreement.