factual

What is the minimum required amount for commercial general liability insurance, including personal injury, completed operations, contractual liability, and products liability, per occurrence for bodily injury for a Spray Net franchise?

Spray_Net Franchise · 2025 FDD

Answer from 2025 FDD Document

any further benefit as a result of your compliance with these requirements.

Insurance Requirements

We require you to procure the following types of insurance and applicable amounts of coverage:

    1. Commercial general liability insurance, including personal injury, completed operations, contractual liability, and products liability, in an amount of not less than Two Million Dollars ($2,000,000) per occurrence for bodily injury and not less than Two Million Dollars ($2,000,000) per occurrence for property damage, and naming us as an additional insured in each such policy or policies;
    1. Fire, vandalism, and extended coverage insurance with primary and excess limits of not less than the full replacement value of the premises of the Franchised Business and its furniture, fixtures, and equipment;
    1. Auto insurance for any Approved Vehicle used in connection with operating the Franchised Business, including Franchisee-owned vehicles and non-Franchisee-owned vehicles, which will include liability coverage in the minimum amount of Two Million Dollars ($2,000,000) per year, as well as commercial auto insurance for Franchisee-owned vehicles, which will include collision and comprehensive coverage as well as liability coverage in the minimum amount of $250,000 per person and $500,000 per accident per year, or the minimum required by state regulations, whichever is greater;
    1. Employer's liability, workers' compensation insurance and such other insurance as may be required by statute or rule of the state or locality in which the Franchised Business is located and operated;
    1. Business interruption insurance in amounts and with terms acceptable to us; and
    1. Such insurance as necessary

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 33–36)

What This Means (2025 FDD)

According to Spray Net's 2025 Franchise Disclosure Document, franchisees are required to maintain commercial general liability insurance. This insurance must include coverage for personal injury, completed operations, contractual liability, and products liability. The minimum coverage required is $2,000,000 per occurrence for bodily injury.

In addition to the minimum coverage amounts, Spray Net requires that they are named as an additional insured on each policy. This protects Spray Net from potential liabilities arising from the franchisee's operations. Franchisees must also ensure that their insurance policies are with carriers rated A-VIII or better by A.M. Best and Company, Inc., unless Spray Net designates specific carriers.

Spray Net retains the right to increase the required coverage amounts or require different or additional insurance coverage periodically. This could be due to factors such as inflation, new risks, changes in law, or higher damage awards. Franchisees are responsible for the costs of these insurance premiums, which will vary based on the carrier's charges, terms of payment, and the franchisee's insurance and payment histories. Franchisees must provide certificates of insurance to Spray Net, with a 30-day notice of cancellation or material modification.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.