What rating must the insurance carriers have from A.M. Best and Company, Inc. for a Spray Net franchise?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee must buy insurance only from carriers rated A-VIII or better by A.M. Best and Company, Inc. (or similar criteria as Franchisor periodically specifies), unless Franchisor designates specific carriers from which Franchisee must purchase coverage (in which case Franchisee may only purchase from the designated carrier(s)). Franchisor may periodically increase the amounts of coverage required under these insurance policies and/or require different or additional insurance coverage to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards, changing economic conditions, or other relevant changes in circumstances. All insurance policies Franchisee purchases must name Franchisor and any affiliate Franchisor designate as additional insureds, and provide for thirty (30) days' prior written notice to Franchisor of a policy's material modification or cancellation. The cost of Franchisee's premiums will depend on the insurance carrier's charges, terms of payment, and Franchisee's insurance and payment histories. 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.
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, franchisees must secure insurance coverage from carriers that have a rating of A-VIII or better from A.M. Best and Company, Inc. Alternatively, Spray Net may designate specific insurance carriers from which franchisees are required to purchase coverage.
Spray Net retains the right to modify the required coverage amounts or mandate different or additional insurance coverage to accommodate factors such as inflation, the emergence of new risks, changes in legal or liability standards, increased damage awards, evolving economic conditions, or other pertinent changes.
All insurance policies obtained by the franchisee must include Spray Net and any designated affiliates as additional insureds. Furthermore, the policies must provide Spray Net with a minimum of thirty days' prior written notice in the event of any material modification or cancellation of the policy. The franchisee is responsible for the timely submission of insurance certificates to Spray Net, including a statement from the insurer guaranteeing at least thirty days' notice before any policy cancellation or significant alteration. It's important to note that securing and maintaining insurance does not absolve the franchisee of any liability to Spray Net under any indemnity requirement outlined in the Franchise Agreement.