Who must Southern Steer Franchisees' insurance policies cover as additional named insureds?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
(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.
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 are required to maintain insurance policies that cover specific parties as additional named insureds. These policies must protect the franchisee, Southern Steer, and their respective affiliates, officers, stockholders, directors, and any other parties that Southern Steer designates. This coverage is designed to protect these parties against any liability that may arise from the franchisee's ownership, maintenance, or operation of the Southern Steer business.
This requirement means that franchisees must ensure their insurance policies explicitly list all the specified parties as additional insureds. This ensures that if a claim arises due to the franchisee's business operations, all named insureds are protected under the policy. The franchisee bears the cost of procuring and maintaining this insurance coverage throughout the term of the franchise agreement.
For a prospective Southern Steer franchisee, this signifies an added layer of responsibility in managing insurance requirements. It is crucial to carefully review the insurance policy to confirm that all required parties are listed as additional named insureds. Failure to comply with this requirement could result in a breach of the franchise agreement and potential liability for any claims not covered due to inadequate insurance. Franchisees should also be prepared to provide proof of insurance and payment to Southern Steer before opening their business.
This type of insurance requirement is common in franchising, as it protects the franchisor from liabilities arising from the franchisee's operations. However, franchisees should carefully evaluate the cost of this comprehensive coverage and factor it into their overall business expenses. It is also advisable to consult with an insurance professional to ensure that the policy meets all the requirements specified by Southern Steer and provides adequate protection for all parties involved.