Does Ledgers require that the insurance policies name Ledgers as an 'additional insured' party?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
eparers must obtain a paid preparer tax identification number ("PTIN") from the IRS.
Insurance**.** You must obtain and maintain, at your own expense, such insurance coverage as required by your state laws. Moreover, you must obtain and maintain insurance coverage as we require, which may exceed insurance coverage required by your state laws. All insurance policies must name us as an "additional insured" party.
Our current insurance specifications are as follows:
- i "all risk" property insurance coverage for assets of the Franchised Business;
- ii workers' compensation insurance and employer liability coverage with a minimum limit of $100,000 or higher if your state law requires;
- iii comprehensive general liability insurance which includes contractual indemnity with a minimum liability coverage of $1,000,000 per occurrence, or higher if your state law requires;
- iv business interruption insurance;
- v commercial automobile liability insurance of at least $1,000,000 or higher if your state law requires;
- vi
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 23–25)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, franchisees are required to obtain and maintain insurance coverage as mandated by state laws, and also as required by Ledgers, which may exceed state law requirements. A key stipulation is that all insurance policies must name Ledgers as an 'additional insured' party.
The specific insurance requirements include 'all risk' property insurance for the assets of the franchised business, workers' compensation and employer liability coverage with a minimum limit of $100,000 (or higher if required by state law), comprehensive general liability insurance with contractual indemnity of at least $1,000,000 per occurrence (or higher if required by state law), business interruption insurance, commercial automobile liability insurance of at least $1,000,000 (or higher if required by state law), and professional liability insurance for errors and omissions in the amount of $1,000,000.
Naming Ledgers as an additional insured party on these policies protects Ledgers from potential liabilities related to the franchisee's business operations. This is a common practice in franchising, as it ensures that the franchisor has some level of protection against lawsuits or claims arising from the franchisee's actions. Franchisees should carefully review these insurance requirements and obtain the necessary coverage to comply with Ledgers' stipulations and state laws.
Prospective franchisees should consult with an insurance professional to understand the costs associated with obtaining the required insurance coverage and to ensure that they are adequately protected against potential risks. It is also important to understand the implications of naming Ledgers as an additional insured party and how it may affect the franchisee's own liability coverage.