Is the Kidokinetics franchisor required to be named as an additional insured on the franchisee's insurance policies?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
or damages.
14. INSURANCE AND INDEMNIFICATION
- 14.1. Procurement. Franchisee shall procure, prior to the commencement of any operations under this Agreement, and maintain in full force and effect during the term of this Agreement at Franchisee's sole cost and expense and to Franchisor's sole satisfaction, insurance policies rated A or better with A.M. Best Company, protecting Franchisee and Franchisor, and naming Franchisor, its officers, directors, partners, owners, employees and affiliates as additional insureds, with at least the following coverage and limits (except as additional coverage and higher policy limits may reasonably be specified from time to time by Franchisor in the Franchise Operations Manual or otherwise in writing):
- 14.1.1. Liability. Franchise will be required to procure and maintain insurance in the amounts Franchisor prescribes. Presently, Franchisor's insurance requirements are as follows: (i) comprehensive general liability insurance in the amount of at least $1,000,000 per occurrence and $2,000,000 in the aggregate, or in the event you lease commercial office space or storage space, such amount as required by your lease or state laws; (ii) umbrella excess liability coverage
in an amount equal to $1,000,000 combined single limit coverage; (iii) automobile insurance in the amount of at least a combined single limit for bodily and property damage of $100,000, or greater if required by state law; and, if you have employees, statutory worker's compensation insurance in the limits required by state law; (iv) hired-non owned automobile insurance; (v) crime insurance for employee dishonesty in the amount of $5,000 combined single limit; (vi) sexual abuse and molestation coverage; (vii) an accident policy; and (viii) workers compensation with $1,000,000 limits or such additional limits as required by state law.
- 14.2. Certificates.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, franchisees are required to name Kidokinetics, along with its officers, directors, partners, owners, employees, and affiliates, as additional insureds on all required insurance policies, with the exception of workers' compensation insurance. Franchisees must also list Kidokinetics as an additional insured and insurance certificate holder.
This requirement means that Kidokinetics is protected under the franchisee's insurance policies, which can help mitigate risks for the franchisor. The franchisee is responsible for providing Kidokinetics with Certificates of Insurance to demonstrate that the required insurance coverage is in effect. These certificates must be provided upon demand or automatically by the insurance carrier.
Franchisees must secure the required insurance policies before starting operations and maintain them throughout the term of the franchise agreement. The insurance policies must be rated A or better by A.M. Best Company. Failing to procure or maintain the required insurance allows Kidokinetics to obtain the insurance and charge the franchisee for the cost, plus an additional 20% of the premium to cover administrative costs.