Insurance Requirements in Franchise Agreements: What to Watch For

Franchise agreements often contain detailed insurance requirements.

Common clauses include:

• $1M / $2M General Liability limits (or higher)

• Umbrella requirements of $2M–$5M

• Franchisor listed as Additional Insured

• Specific wording requirements

• Proof of insurance annually

Many franchisees discover these requirements only after signing.

If your policy does not match the agreement, you may face:

• Compliance notices

• Fines

• Risk of termination

Before renewal, compare your insurance policy against your franchise agreement.

Call 704-248-2657 if you’d like a compliance review.

About the Author

Renado Robinson works with franchise operators to ensure their insurance programs align with corporate requirements and reduce compliance risk.