Cell Based mostly Franchising and Legal responsibility Insurance coverage Points in Franchising Agreements

Cell based mostly franchising firms should take into account the potential eventuality of being sued or named in a lawsuit, which is directed at a franchisee because of a visitors accident whereas conducting the franchise shops enterprise operations. In locations like New York, California, Washington D.C. the variety of lawsuits from visitors accidents are astounding. With out safety and separation from the franchise shops, a franchisor may unnecessarily open themselves up for legal responsibility problems with considered one of their franchisees.

It is because of this that in my franchising agreements are determined to spend particular consideration to the clauses concerning insurance coverage, limits of legal responsibility and operations of autos within the franchise enterprise. Under is a replica of the clause that I inserted into our franchise agreements; how do i know when my sr22 is up

three.21 Insurance coverage

three.21.1 Limits of Legal responsibility

Previous to the graduation of any operations beneath this Settlement, Franchisee should preserve, at their sole expense, a enterprise legal responsibility, complete and accomplished operations insurance coverage coverage or insurance policies in accordance with requirements and specs set forth within the Confidential Operations Guide, which should embody at a minimal the next protection:

(a) Complete common legal responsibility insurance coverage, within the quantity of $100,000 bodily
harm per prevalence and $50,000 property harm per prevalence;

(b) Car insurance coverage within the quantity of $100,000 single restrict, together with
complete and collision;

(c) Employee’s Compensation and Employer’s legal responsibility insurance coverage (if Franchisee
has workers); and

(d) Tools insurance coverage for the worth of all The Automotive Wash Guys gear.
If Franchisee funds the gear, the lending establishment may require Franchisee to take care of hearth/theft/complete insurance coverage for the worth of that gear.

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