What are the minimum coverage requirements for automobile liability insurance for a Pump It Up franchise?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
designate different PIU Vendors to supply all or certain components of the Start Up Package.
Insurance
Before you commence activities under the Franchise Agreement, and before the Franchised Business opens, you must obtain at your sole expense, and continue to maintain in full force and effect at all times, certain insurance for liabilities caused by or occurring in connection with the development or operation of the Franchised Business. This insurance coverage must include, at a minimum, insurance policies of the kinds required by the Manuals and in the amounts required by the Manuals.
The current minimum requirements for insurance policies and coverage include: (1) comprehensive general liability insurance with limits of the greater of (i) $1,000,000 per occurrence and $2,000,000 aggregate; or (ii) those amounts required by the state or local government in which your Franchised Business is located; (2) worker's compensation and employer's liability insurance, as well as such other insurance as may be required by statute or rule of the state in which the Franchised Business is located and operated; (3) employment benefits liability coverage; (4) automobile liability insurance, and property damage liability, including owned, non-owned, and hired vehicle coverage, with at least $1,000,
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 25–29)
What This Means (2025 FDD)
According to Pump It Up's 2025 Franchise Disclosure Document, franchisees must maintain automobile liability insurance and property damage liability, including owned, non-owned, and hired vehicle coverage. The minimum coverage required is $1,000,000 combined single limit, with a $2,000,000 general aggregate limit.
Pump It Up requires franchisees to secure this insurance before commencing activities under the Franchise Agreement and before opening the franchised business. Franchisees must maintain this insurance coverage at all times during the operation of the franchise.
It is important to note that Pump It Up may increase the minimum required coverage or modify insurance requirements at any time to reflect inflation, new risks, changes in law, higher damage awards, or other relevant changes. The franchisor will provide written notice of such modifications, and franchisees must promptly secure the additional coverage or higher policy limits. All insurance policies must name Pump It Up and any designated affiliates as additional named insureds and provide for 30 days' prior written notice of any material modification, cancellation, or expiration of the policy.
Failure to obtain and maintain the specified insurance can result in Pump It Up securing the insurance on behalf of the franchisee, with the franchisee responsible for reimbursing all premiums, costs, and expenses incurred by Pump It Up, plus a reasonable fee for their time.