What is the maximum deductible or self-insured retention amount allowed for insurance policies covering the Management Recruiters Franchise Business?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
ET 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.
- 11.3. Policy Requirements. All insurance policies covering the Franchise Business must:
- name Franchisor as an additional insured, provided, however, that this requirement shall not apply to any policy for which only an employer may be named as an insured, such as workers' compensation;
- contain no provision that in any way limits or reduces coverage for the Franchisee below the aggregate limits provided in the policy in the event of a claim by any one or more of the Indemnitees;
- waive any rights of recovery the insurance companies may have against Franchisor;
- be prim
Source: Item 23 — RECEIPTS (FDD pages 67–327)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, all insurance policies covering the franchise business must have a deductible or self-insured retention of $10,000 or less. This requirement is part of the broader set of policy requirements that Management Recruiters franchisees must adhere to.
This means that if a Management Recruiters franchisee chooses an insurance policy with a deductible, the maximum amount they can set for that deductible is $10,000. Similarly, if they opt for a self-insured retention, they cannot retain more than $10,000 of risk themselves. This limitation is in place to ensure that franchisees maintain adequate coverage and can handle potential claims without facing excessive out-of-pocket expenses.
For a prospective Management Recruiters franchisee, this requirement has several implications. It limits the potential cost savings that can be achieved by opting for higher deductibles or self-insured retentions. While higher deductibles typically result in lower premium costs, the $10,000 limit means that franchisees may need to pay higher premiums to comply with Management Recruiters' insurance requirements. It also ensures that Management Recruiters is named as an additional insured on the franchisee's policies, with some exceptions like worker's compensation, and that the policies do not limit coverage for the franchisee below the aggregate limits provided.
It is important for prospective franchisees to factor these insurance costs into their overall financial planning and to shop around for policies that meet Management Recruiters' requirements while still offering competitive rates. Franchisees must also submit a certificate of insurance to Management Recruiters before starting New Office Training and annually within ten days of Management Recruiters' request, demonstrating that they have secured the required coverage.