Considerations for franchisors insurance are to outline the coverage you need depending on your business activities in the franchise contract. FDDs are also known as disclosure documents. what is franchise insurance
The required franchise insurance policies cover most business activities, but some important policies are left out. As a result, franchisees should review their policies to determine what is covered and if they need additional coverage
The next step is to create your franchise plan. The plan will ensure that all insurance required by the FDD, as well as any additional coverage, is provided
- Commercial General Liability : General liability insurance, also known as commercial general liability, is one of the most sought-after commercial policies for business owners across all sectors.
- Business Interruption Insurance – Sometimes referred to as loss of business income insurance, business interruption insurance covers certain events that occur beyond the owner’s control. .
- Commercial Auto Liability Insurance – Many franchises rely on vehicles to run errands, pick up supplies, deliver goods or perform other essential tasks.
Franchise insurance is important
A franchisee assumes certain responsibilities when they agree to run the business.
Do You Need Franchise Insurance?
Franchise insurance varies depending on whether you are a franchisor or a franchisee. You will also need insurance if you participate in business activities and meet the contract requirements.
We will explain what kind of franchise insurance will protect your business and make sure you’re always compliant in this article.
How Should Franchisors Approach Their Business?
Franchisees should ensure that they have franchise in policies in place. In case of unforeseen circumstances in each location, this will help to protect the business.
Franchisors are protected by the following policies:
- Insurance against errors and omissions
- Liability insurance for management
What Types of Franchise Insurance Need?
Now that you know what to look for in an insurance plan, let’s talk about the franchise insurance requirements.
The following are five of the most common risks and the insurance needed for each.
1. Bringing in clients or sending employees home
Public liability insurance is important if franchises invite customers in or send employees out to interact with clients.
2. Occupational Safety
No matter what type of franchise you own, you are likely to have injured or sick employees.
3. Liability for products
Franchises that sell physical products need to protect themselves from lawsuits that may result from injuries resulting from their products. Franchisees can protect their businesses from these claims by purchasing product liability insurance.
For franchises that own or rent properties, it is important that policies are in place to cover property damage. Commercial property can provide this protection.
Lastly, if vehicles are part of a franchise’s operations, commercial car insurance must be included.
Keeping track of franchise insurance policies
When you know what insurance coverage you need, the next step is to make sure all the policies are in compliance. The challenge is keeping track of multiple policies.
In one click, franchises can upload and track all certificates of insurance (COIs) required for each insurance policy. Find out how we can help your business stay compliant by requesting a free demo today.