How is the business insurance premium determined for a Management Recruiters franchise with revenue above $2,000,000?

yroll and related services.

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 expense coverage. This insurance

shall be written for the replacement cost of Franchisee's real and personal property and on an actual loss sustained basis for the business income and extra expense;

• ERRORS AND OMISSIONS in the amount of $1,000,000.00 per claim and annual aggregate;
• EMPLOYMENT PRACTICES LIABILITY in the amount of $1,000,000.00 per claim and annual aggregate. This insurance is required regardless of whether or not Franchisee has employees;
• COMMERCIAL BLANKET EMPLOYEE DISHONESTY BOND including coverage for any ERISA plans in the amount of $100,000.00 or 10% of the ERISA plan assets, whichever is greater, if Franchisee has employees;
• LICENSE BOND if required by applicable Law;
• UNEMPLOYMENT COMPENSATION with the statutory minimum limits set by applicable Law unless Franchisee is a sole proprietor and the state Law in Franchisee's state does not require this for sole proprietors.
• Any and all other types and limits of insurance that may be required, from time to time, by Franchisor or applicable Law.

In some cases, MRI has contracted for discounts with third-party suppliers for services they provide to you. In some cases, the third-party supplier has required MRI to be the contracting party for a particular service at the discounted rates.

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 26–29)