factual

Does Spray Net require the franchisee to be named as an additional insured on the commercial general liability insurance policy?

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 name Spray Net as an additional insured on their commercial general liability insurance policies. The commercial general liability insurance must include personal injury, completed operations, contractual liability, and products liability coverage. The minimum coverage required is $2,000,000 per occurrence for bodily injury and $2,000,000 per occurrence for property damage.

In addition to commercial general liability insurance, Spray Net franchisees must also maintain other types of insurance, including fire, vandalism, and extended coverage insurance, auto insurance, employer's liability and workers' compensation insurance, and business interruption insurance. The specific amounts and terms for these policies must be acceptable to Spray Net.

Spray Net also stipulates that franchisees must purchase insurance from carriers with a rating of A-VIII or better by A.M. Best and Company, Inc., unless Spray Net designates specific carriers. Spray Net may also increase the required coverage amounts or require different or additional insurance coverage periodically. Franchisees are responsible for providing certificates of insurance to Spray Net and ensuring that Spray Net receives at least thirty days' prior written notice of any material modification or cancellation of a policy.

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.