Does the insurance policy for a Pearce Bespoke franchise need to protect both the franchisee and franchisor?
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, the insurance policies a franchisee obtains must expressly protect both the franchisee and the franchisor. These policies also require the insurer to defend both the franchisee and the franchisor in any legal action.
Specifically, the franchisee is required to secure and maintain public liability insurance with products/completed operations coverage and premises liability of no less than $1,000,000 per occurrence and $2,000,000 in the aggregate. Additionally, they must have bailee insurance to protect consignment goods, along with any other insurance types and amounts that Pearce Bespoke may reasonably require.
Pearce Bespoke must be named as an additional insured on each policy, and the policies must stipulate that they cannot be canceled, amended, or modified without providing Pearce Bespoke with 30 days' prior written notice. Franchisees must furnish endorsements or other proof of insurance to Pearce Bespoke annually or upon request, demonstrating that they maintain all required insurance policies. It's important to note that maintaining the required insurance does not relieve the franchisee of their indemnification obligations.