What are the insurance coverage obligations for a Remax franchisee during the term of the franchise agreement?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
You must at all times during the Term of the Franchise and this Agreement, and any extension or renewal thereof, maintain in force at your sole expense such insurance coverage that we require from time to time and to meet the insurance related obligations in this Agreement (your obligation to obtain and maintain the insurance described below shall not be limited in any way by reason of any insurance we or our Related Parties maintain, nor will your performance of such obligations relieve you of any obligations under Section 5 of this Agreement). This insurance shall include, at a minimum, the following coverage:
a. Comprehensive General Liability.
All insurance policies must contain a waiver by the insurance carrier of all subrogation rights against REMAX Regional, RE/MAX Holdings, Inc., REMAX, LLC and other parties covered by the insurance and must contain a provision that REMAX Regional, RE/MAX Holdings, Inc. and REMAX, LLC receive 30 days prior written notice of termination, expiration, cancellation, or modification of any such policy.
All insurance coverage required pursuant to this Subsection must be maintained under one or more policies of insurance—and contain such terms and conditions—as specified from time to time by REMAX Regional. You agree to obtain insurance policies with an insurance company that has an A.M. Best's rating of at least an A- and an A.M. Best's financial size category of at least VIII.
You must furnish to us—or our designee—a copy of the certificate of or other evidence of the procurement, renewal or extension of each above referenced insurance policy at least 30 days prior to the effective date of such procurement, renewal or extension and thereafter annually or at our or our designee's request. The insurance certificate must show compliance with all required insurance specifications. Should we use a third-party vendor or other designee to track certificates of insurance, you agree to provide each required certificate of insurance directly to such vendor or designee.
All third parties that you hire shall provide evidence of general liability coverage, automobile liability coverage, workers' compensation and employer's liability coverage, and other coverages we deem necessary. Coverage will be in favor of Franchisee, REMAX Regional, and REMAX, LLC and shall include additional insured status, primary and non-contributory coverage, and waiver of subrogation.
You agree that immediately after the termination or expiration of the Franchise, or the Abandonment of the Office, you will purchase an extended reporting period endorsement covering a period of 3 years from the date of termination of this Agreement or the Abandonment of the Office (as set forth in more detail in Subsection 8.D.).
REMAX Regional reserves the right to designate an insurance agency or broker that you must use, at your expense, to comply with your insurance obligations.
Failure to maintain insurance is a material breach of the Agreement and may result in termination of the Franchise Agreement. If you at any time fail or refuse to maintain in effect any insurance coverage required by us, or if we determine that your coverage is inadequate or does not comply with our requirements, or you fail to furnish satisfactory evidence of such insurance, we may, at our option and in addition to any other rights and remedies we may have under this Agreement, obtain such insurance coverage on your behalf, although we are under no obligation to do so. You agree to fully cooperate with us—or our designee—in our efforts to obtain such insurance policies, promptly execute any and all forms or instruments required to obtain any such insurance, allow any inspections of the premises of the Office which are required to obtain such insurance, and reimburse us, on demand, for any costs and premiums we may incur.
Source: Item 22 — Contracts (FDD pages 108–334)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, franchisees must maintain specific insurance coverage throughout the term of the franchise agreement, including any extensions or renewals. The franchisee is solely responsible for the expense of this coverage, and their obligation to maintain the required insurance is not limited by any insurance that Remax or its related parties may carry. Furthermore, the franchisee's insurance obligations do not relieve them of any responsibilities outlined in Section 5 of the agreement.
The required insurance coverage includes, at a minimum, comprehensive general liability. All insurance policies must include a waiver of subrogation rights against REMAX Regional, RE/MAX Holdings, Inc., REMAX, LLC, and other covered parties. These policies must also provide REMAX Regional, RE/MAX Holdings, Inc., and REMAX, LLC with 30 days' prior written notice of any termination, expiration, cancellation, or modification. Remax Regional reserves the right to designate the insurance agency or broker that franchisees must use to meet their insurance obligations, at the franchisee's expense.
All insurance coverage must be maintained under policies from an insurance company with an A.M. Best's rating of at least A- and a financial size category of at least VIII. Franchisees must provide a copy of the certificate or other evidence of insurance procurement, renewal, or extension to Remax (or its designee) at least 30 days before the effective date, and annually thereafter or upon request. The insurance certificate must demonstrate compliance with all required insurance specifications. Failure to maintain the required insurance constitutes a material breach of the Franchise Agreement and may result in termination.
If a franchisee fails to maintain the required insurance, Remax has the option (but not the obligation) to obtain the necessary coverage on the franchisee's behalf. The franchisee must fully cooperate with Remax in obtaining such insurance, including executing required forms, allowing inspections of the office premises, and reimbursing Remax for any incurred costs and premiums. Additionally, all third parties hired by the franchisee must provide evidence of general liability coverage, automobile liability coverage, workers' compensation, employer's liability coverage, and other coverages deemed necessary by Remax. This coverage must favor the franchisee, REMAX Regional, and REMAX, LLC, and include additional insured status, primary and non-contributory coverage, and waiver of subrogation. Upon termination or expiration of the franchise agreement, franchisees must purchase an extended reporting period endorsement covering a period of 3 years from the date of termination or abandonment of the office.