What is the minimum amount of comprehensive general liability insurance, including automobile liability coverage, builder's risk, private liability, and independent contractors coverage, that the general contractor must maintain for a Spray Net franchise, with Spray Net named as an additional insured?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
tories. Franchisee shall make timely delivery of certificates of all required insurance to Franchisor, each of which shall contain a statement by the insurer that the policy will not be cancelled or materially altered without at least thirty (30) days' prior written notice to Franchisor. The procurement and maintenance of such insurance shall not relieve Franchisee of any liability to Franchisor under any indemnity requirement of this Agreement.
- B. General Contractor Insurance. In required by an applicable law where the Franchised Business is authorized to operate, Franc
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, the general contractor must maintain comprehensive general liability insurance, including automobile liability coverage, builder's risk, private liability, and independent contractors coverage, in at least the amount of $2,000,000, with Spray Net named as an additional insured, if required by an applicable law where the Franchised Business is authorized to operate. The general contractor must also maintain workers' compensation and employer's liability insurance as may be required by law.
This requirement ensures that both the franchisee and Spray Net are protected from potential liabilities arising from the general contractor's operations. The $2,000,000 minimum coverage provides a financial safety net in case of accidents, injuries, or damages caused by the contractor during the course of their work. Naming Spray Net as an additional insured further protects the franchisor from liability related to the contractor's actions.
It is important for prospective Spray Net franchisees to understand this insurance requirement and ensure that their general contractor complies with it. Failure to do so could result in the franchisee being held liable for the contractor's actions. Additionally, if the franchisee fails to ensure the contractor has the required insurance, Spray Net has the right to procure the insurance coverage and charge the franchisee for the costs incurred, including premiums and an administrative fee.
Spray Net also requires franchisees to obtain their own insurance policies, including commercial general liability insurance of not less than $2,000,000 per occurrence for bodily injury and not less than $2,000,000 per occurrence for property damage, auto insurance with liability coverage in the minimum amount of $2,000,000 per year, and other types of insurance. Franchisees must buy insurance only from carriers rated A-VIII or better by A.M. Best and Company, Inc., unless Spray Net designates specific carriers.