Is bailee insurance required to protect consignment goods for a Pearce Bespoke franchise?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
ecuted Confidentiality/Non-Competition Agreements from employees, agents and third persons as required by this Section.
10. INSURANCE; BONDING
A. Insurance.
Franchisee will obtain and maintain in force (under policies of insurance issued by a carrier that is rated A- or better by AM Best) and pay the premiums for public liability insurance with products/completed operations coverage and premises liability of no less than one million dollars ($1,000,000.00) per occurrence and two million dollars ($2,000,000.00) in the aggregate, bailee insurance protecting Franchisee's consignment goods and other insurance in such types and amounts as Franchisor may reasonably require. Such insurance policies will expressly protect both Franchisee and Franchisor and will require the insurer to defend both Franchisee and Franchisor in any action. In addition, each such insurance policy must name Franchisor as an additional insured, and provide that such policy will not be canceled, amended, or modified except upon thirty (30) days' prior written notice to Franchisor. On an annual basis and upon Franchisor's request, Franchisee will furnish to Franchisor endorsements or other proof of insurance Franchisor requires evidencing that Franchisee has obtained and is maintaining in force all required insurance policies. Maintenance of the insurance requirement will not relieve Franchisee of the obligations of indemnification stated in Section 11 below. If Franchisee fails to obtain or maintain in force any insurance as required by this Section or to furnish any endorsements or other proof of insurance Franchisor requires hereunder, Franchisor may, in addition to all other available remedies, obtain
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Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, franchisees are required to obtain and maintain bailee insurance to protect consignment goods. This insurance must be active throughout the term of the franchise agreement. The policy must be issued by a carrier with an AM Best rating of A- or better.
The bailee insurance is in addition to public liability insurance with products/completed operations coverage and premises liability of no less than one million dollars ($1,000,000.00) per occurrence and two million dollars ($2,000,000.00) in the aggregate. Pearce Bespoke may also reasonably require other types and amounts of insurance.
The insurance policies must expressly protect both the franchisee and Pearce Bespoke, requiring the insurer to defend both in any action. Pearce Bespoke must be named as an additional insured, and the policy cannot be canceled, amended, or modified without thirty (30) days' prior written notice to Pearce Bespoke. Franchisees must provide annual proof of insurance and endorsements to Pearce Bespoke upon request. Failure to maintain the required insurance allows Pearce Bespoke to obtain the insurance and seek reimbursement from the franchisee for all costs incurred.