Is Workers' Compensation coverage required for Management Recruiters franchisees in all states?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
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 F
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 26–29)
What This Means (2024 FDD)
According to Management Recruiters's 2024 Franchise Disclosure Document, whether a franchisee is required to have Workers' Compensation coverage depends on the laws of the state where the franchise is located. Management Recruiters requires franchisees to maintain Workers' Compensation insurance with the statutory minimum limits set by applicable law. However, this requirement is waived if the laws of the franchisee's state do not mandate such coverage for sole proprietors.
This means that a prospective Management Recruiters franchisee needs to investigate the specific Workers' Compensation laws in their state to determine if they are required to obtain this coverage. The cost of Workers' Compensation insurance, where required, will be an additional expense for the franchisee.
In addition to Workers' Compensation, Management Recruiters franchisees are required to have Commercial General Liability insurance, Business Automobile Liability insurance (if the franchisee owns a vehicle), Employer's Liability insurance, Property insurance, Errors and Omissions insurance, Employment Practices Liability insurance, Commercial Blanket Employee Dishonesty Bond (if the franchisee has employees), a License Bond (if required by law), and Unemployment Compensation insurance. The franchisee must also adhere to any other insurance requirements that may be mandated by Management Recruiters or applicable law from time to time.