What endorsements are required on insurance policies obtained by Itan franchisees?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
These policies reflect our minimum requirements and may not be adequate to protect you. You may wish to procure additional coverage. You must provide us with proof of coverage: (a) prior to opening; (b) within 10 days after a policy renewal; and (c) any other time on demand. 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 ensure their insurance policies meet specific endorsement requirements. These policies must name Itan and its owners, officers, and directors as additional insureds, which provides Itan with liability coverage under the franchisee's policy. Additionally, franchisees must secure a waiver of subrogation rights against Itan, preventing the insurance company from pursuing claims against Itan for any losses they might cover.
Itan franchisees are also obligated to provide Itan with at least 30 days' prior written notice if there are any changes to the policy, such as termination, expiration, cancellation, or modification. This advance notice allows Itan to take necessary steps to ensure continuous coverage and protect its interests. The insurance policies must be obtained from licensed insurance carriers with an AM Best rating of A or better, indicating financial stability and the ability to pay claims.
These requirements are in place to protect Itan from potential liabilities and ensure that franchisees maintain adequate insurance coverage. Itan retains the right to disapprove any policy that does not meet these criteria, and franchisees must then secure a new, compliant policy immediately. Furthermore, Itan can increase the minimum liability coverage amount or require different or additional types of insurance, such as excess liability (umbrella) insurance, based on factors like inflation, special risks, changes in laws, 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.