What is the average annual cost of business insurance for a Management Recruiters franchise with revenue between $0 and $500,000?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
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You have an ongoing required expense for business insurance premiums. The premiums vary depending on revenue in your business, your credit rating, and the type of payment schedule you choose. We do not require members to provide us with expense information and cannot determine what percentage this will be of your ongoing costs, but the average annual costs for $0 to $500,000 in revenue is $1,750, $500,000 to $1,000,000 is $2,250, $1,000,000 to $2,000,000 is $3,000. Anything above $2,000,000 in revenue must be determined by an underwriting review. You are required to have the following insurance coverage:
- COMMERCIAL GENERAL LIABILITY including bodily injury and property damage liability for premises and operations, contractual liability, personal injury liability and, if applicable, stop gap coverage in the amount of $1,000,000.00 each occurrence and $2,000,000.00 annual aggregate;
- BUSINESS AUTOMOBILE LIABILITY if Franchisee is a corporate entity that owns a vehicle: including bodily injury and property damage liability for owned, leased, non-owned, and hired autos used in the Franchise Business in the amount of $1,000,000.00 each accident;
- WORKERS' COMPENSATION with the statutory minimum limits set by applicable Law, unless the Laws of Franchisee's state do not require this coverage for sole proprietors;
- EMPLOYER'S LIABILITY in the amount of $500,000.00 or statutory minimum limits, whichever is greater;
- PROPERTY including "all-risk" coverage on all real and personal property owned, leased, or rented by Franchisee as well as business income and extra expe
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 26–29)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, franchisees are required to maintain business insurance. The average annual cost of business insurance for a Management Recruiters franchise with revenue between $0 and $500,000 is $1,750. However, the FDD notes that the actual premiums may vary based on factors such as the franchisee's business revenue, credit rating, and chosen payment schedule.
Management Recruiters requires franchisees to carry several types of insurance coverage, including commercial general liability ($1,000,000 per occurrence and $2,000,000 annual aggregate), business automobile liability ($1,000,000 per accident if the franchisee owns a vehicle), workers' compensation (with statutory minimum limits), employer's liability ($500,000 or statutory minimum), property insurance (replacement cost), errors and omissions insurance ($1,000,000 per claim and annual aggregate), employment practices liability ($1,000,000 per claim and annual aggregate), a commercial blanket employee dishonesty bond ($100,000 or 10% of ERISA plan assets), a license bond (if required), and unemployment compensation (with statutory minimum limits).
Prospective franchisees should consider that the $1,750 average is just an estimate. The actual cost could be higher or lower depending on their specific circumstances. It is important to obtain quotes from multiple insurance providers to find the best coverage at a competitive price. Franchisees should also ensure they understand the specific coverage requirements outlined in the Franchise Agreement to avoid any gaps in their insurance protection.
It is also important to note that Management Recruiters may, from time to time, require additional types and limits of insurance coverage, so franchisees should be prepared for potential changes in insurance requirements. Franchisees should discuss insurance requirements and options with the franchisor and an insurance professional to ensure they have adequate coverage.