Franchise insurance???

[NCAgent828]

Hey guys and gals!

I have an owner of a business that has general liability. I am working on a quote for her GL policy for the business and all of her personal lines stuff as well.

The issue is that she is beginning to sell territories to other individuals as a franchise. They are getting their own GL insurance. Because she is offering the business as a franchise opportunity, what other coverages does she need to consider having? What other coverages is she required to have?

When i asked her about additional coverage outside of standard GL coverage she said she is asking her attorney but i'm not so sure if he would know what is "needed" over what is "required" and i want to be able to advise her of the best options to protect herself.

 

[Markthebroker]

If you don't know, then frankly you are probably in over your head and should refer it to a more qualified agent.

Asking another agent what your customer needs based on this small amount of information is like me calling my doctor and saying "My left eye hurts. What kind of medication do I need an what's wrong?"

With that said, if the franchisees have their own businesses, and their own fein#'s then they are separate businesses, and are only accepting advice, so they need their own policies. What the franchisor probably needs is a professional liability policy covering for "bad advice" among other things.

 

[VolAgent]

I thought you joined MEAA? There is a woman who would be glad to answer this question, as well as any of the numerous MGAs they have available.

But otherwise Mark is right, may not gentle, but right. Which is always my reluctance to get into CL. I know I can't know everything, but I really would love to have at least some idea what are typical risks and exposures for a class of business.

 

[Markthebroker]

Basically, if you are a franchisor, than you’re an advisor, of sorts. In the most basic of concepts, a franchisor is giving advice to the franchisees. So, while the financial success and failure can't be insured for, if, say, the franchisor says "do this" or "do that" and the franchisee gets in trouble, or gets sued, or someone gets hurt, then the franchisor needs some sort of an e&o policy, similar to what us agents purchase.


But again, it depends on the situation, and further questions are needed.