What AM Best rating is required for insurance carriers providing coverage to Itan franchisees?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
You must obtain these policies from licensed insurance carriers rated A or better by AM Best. Each policy must satisfy all requirements in the Manual and be endorsed to: (a) name us and our owners, officers and directors as additional insureds; (b) waive all subrogation rights against us; and (c) provide us with at least 30 days' prior written notice of the termination, expiration, cancellation or modification of the policy. We may disapprove any policy that fails to meet these criteria, and you must immediately secure a new policy meeting our criteria. Upon 10 days' notice, we may increase the minimum liability coverage amount of any policy and/or require different or additional types of insurance, including excess liability (umbrella) insurance, due to inflation, special risks, changes in Law or standards of liability, higher damage awards or other relevant changes in circumstances. If you fail to maintain a required policy we may, at our option, obtain the policy on your behalf. If we do so, you must promptly sign any application or other form required to obtain the policy and reimburse all premiums and other costs we incur.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, franchisees must secure insurance policies from licensed carriers with a rating of A or better by AM Best. This requirement ensures that the insurance provider has a strong financial standing and ability to cover potential claims.
Itan mandates that these policies meet specific criteria outlined in their manual and must include Itan and its owners, officers, and directors as additional insureds. The policies must also waive all subrogation rights against Itan and provide at least 30 days' prior written notice of any termination, expiration, cancellation, or modification. Itan retains the right to disapprove any policy that fails to meet these criteria, and franchisees are obligated to immediately obtain a new, compliant policy.
Furthermore, Itan reserves the right to increase the minimum liability coverage amount or require different or additional types of insurance, including excess liability (umbrella) insurance, due to factors such as inflation, special risks, changes in law, or higher damage awards. If a franchisee fails to maintain the required insurance, Itan has the option to obtain the policy on the franchisee's behalf, with the franchisee responsible for reimbursing all premiums and costs incurred.