What A.M. Best rating must the insurance company providing coverage for a Southern Steer franchise have?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
(a) Insurance Policies. The Franchisee must, at its expense, procure and maintain in full force and effect insurance policies, in such amounts and on such terms, as prescribed below or by the Franchisor in the Brand Manual, by an insurance company which is acceptable to and approved by the Franchisor at all times during the Initial Term of this Agreement and any Interim Period, licensed in the state where coverage is provided, and carries an A.M. Best rating of at least A-VII. The Franchisee must obtain such policies before opening the Southern Steer Business. The Franchisee must also procure and pay for all other insurance required by state or federal law, including, without limitation, workers' compensation and unemployment insurance. Nothing in this Agreement will prevent the Franchisee from purchasing insurance with coverage amounts in excess of the coverage amounts required by the Franchisor.
- (b) Coverage.
Insurance policies must insure the Franchisee, the Franchisor, and their respective Affiliates, officers, stockholders, directors, and all other parties designated by the Franchisor, as additional named insureds against any liability that may accrue against them by reason of the ownership, maintenance or operation by Franchisee of the Southern Steer Business.
- (c) Requirements.
The policies must also stipulate that the Franchisor will receive a 30-day prior written notice of cancellation, non-renewal, or elimination, and must contain endorsements by the insurance companies waiving all rights of subrogation against the Franchisor.
Original or duplicate copies of all insurance policies, certificates of insurance, or other proof of insurance acceptable to the Franchisor, including original endorsements affecting the coverage required by this Section, must be furnished to the Franchisor by the Franchisee, together with proof of payment, prior to the opening of the Southern Steer Business.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, franchisees must secure insurance policies from a company that maintains an A.M. Best rating of at least A-VII. This requirement ensures that the insurance provider has a strong financial standing and the ability to cover potential claims. The insurance company must also be acceptable to and approved by Southern Steer.
This insurance coverage must be in place at all times during the Initial Term of the Franchise Agreement and any Interim Period. Furthermore, the chosen insurance company must be licensed in the state where coverage is provided. The franchisee is responsible for obtaining these policies before opening their Southern Steer Business, in addition to any other insurance required by state or federal law, such as workers' compensation and unemployment insurance.
The insurance policies must include Southern Steer and its affiliates, officers, stockholders, and directors as additional named insureds, protecting them against liabilities arising from the franchisee's operation of the Southern Steer Business. Southern Steer also requires a 30-day prior written notice of cancellation, non-renewal, or elimination of the policies, and the insurance companies must waive all rights of subrogation against Southern Steer. Franchisees must provide Southern Steer with copies of all insurance policies, certificates, or other acceptable proof of insurance, along with proof of payment, before opening their business.