What is Franchise Insurance?

What You’ll Find In This Article

Opening a franchise can be very profitable, but these profits don’t come without risks. As a franchisee, you want to make sure you run your business according to the franchisor’s business model. One minor mishap may allow the franchisor to suffer from financial, reputable, and license losses.

As a franchisee, you’re agreeing to take responsibility for acquiring the proper insurance requirements of the franchisor’s demands to avoid significant losses. It is vital as a business owner to look at different insurance programs, insurance brokers, and insurance premiums that best meet the business operation needs.

Working closely with an insurance professional can guarantee you will be covered in all your franchising needs.

How Does Franchise Insurance Work?

When looking to protect your franchise and your employees, you first want to make sure you research the best insurance coverage out there. Once you find an insurer that best fits your business needs, you will pay them a monthly premium. 

Depending on your franchise business, there are certain liabilities you need to be aware of. Some can include property damage, personal injury, product liability, or business interruption for financial losses. If any were to happen, your insurance company would be able to cover these incidents, of course, depending on your policy limit and what your insurance covers. 

Types of Franchise Insurance

A franchisor will generally outline the proper insurance necessary in your Franchise Disclosure Document (FDD) as a franchisee. It is up to you, the franchise owner, to ensure there aren’t other liabilities outside of the document that needs to be covered depending on the employment practices.

Here are a few insurance policies that franchisees should carry.

Property Insurance

When becoming a franchise owner, the first thing to consider is ensuring your property building is fully secured and protected. Having property insurance can help you protect yourself from any incidents like fire, smoke, vandalism, and anything that may occur damage to your business property.

Public Liability Insurance 

If your franchise business has customers coming in and out daily and employees are constantly interacting with customers, Public Liability Insurance is necessary. 

Public Liability Insurance protects business owners and their assets, property damage that has occurred from a customer. This policy helps protect your business from any legal action or compensation claims made against your business.

Product Liability Insurance 

Protecting your inventory is something you always want to secure. If you do not have inventory, you aren’t generating any type of business. Having Product Liability Insurance can help from any possible lawsuits that can cause bodily injuries from faulty products.

General Liability Insurance 

General Liability Insurance is the one policy every business owner should have. As a franchisee, this policy will protect you and the franchisor from any incidents. It is important to review your franchisee documents thoroughly to make sure you have the proper setup.

If a customer comes in and trips over a flower pot, that would be a cosmetic addition to the business that the franchisor may not require so that the franchisee will be at fault. 

Workers’ Compensation 

No matter the type of franchise you decide to open, the safety of your employees is always first. You signed up to take responsibility for a business and employees. With any business, there are always risks that can happen and eventually hurt someone. 

Workers’ compensation can help protect the franchise and the employee from any injuries or illnesses that occur in the workplace.

Professional Liability

If your business were ever facing a lawsuit, Professional Liability Insurance would help cover any legal fees that the company may face.

Commercial Auto Insurance

Depending on your business, especially the food franchise industry that provides deliveries services, auto insurance is also important. If your franchise requires commercial vehicles, it is important to add commercial insurance. Auto liability is very important when sending out your employees to do a job. 

What Franchises Need Franchise Insurance? 

The majority of call franchise owners should consider getting franchise insurance. To make sure all your business operations run smoothly, having insurance coverage can help protect you and your business.

It’s always best to add general liability insurance, public liability insurance, and auto insurance to avoid any business interruptions. 

Why Do Franchises need Franchise Insurance?

We protect our valuables like health insurance, life insurance, auto insurance; it is necessary to get business insurance for your franchise. It’s best to analyze risk management before the situation gets worse. Protecting your employees, inventory, and property are all necessary reasons to get the best insurance coverage you can to avoid business interruption. 

It’s always necessary to have the proper insurance requirements that the franchisor asks for to avoid losses to the business.

Avoid losses from your business and select the best insurance policies to protect your employees and business.

Everything You Need To Know On How To Start a Franchise

Thinking of becoming a franchisee? We’re here to help you through the steps of starting a franchise!

14 Questions to Ask When Buying a Franchise

Have you ever wondered what questions to ask a franchisor, what questions a franchisee might be asked?

How To Open A Franchise Restaurant

Before signing your franchise agreement, understand how the franchise model works and the pros and cons of franchise restaurants.

What Does a Franchise Broker Do?

Do you need some help finding the best franchise to invest in? Learn more about the benefits, costs, and risks of working with a franchise broker!

How Do Franchises Make Money

Before owning a franchise, it’s vital to understand how franchises make money, how much do franchise owners make, and learn from the most profitable franchises.

Top Entertainment Franchises That Are Growing

The entertainment franchise industry is in full swing as the world rebounds from COVID-19.

What is the Difference Between Franchisor vs. Franchisee?

What You’ll Find In This Article What is the Definition of Franchisee?What is the Definition of Franchisor?What is the Role …

11 Songs About Hotels

What You’ll Find In This Article What Are Some Songs about Hotels? Hotel California – The Eagles Heartbreak Hotel – Elvis Presley Holiday …

What are Franchise Royalty Fees?

Franchise fees include the initial franchise fee and the franchise royalty fee. These fees are typically paid monthly but sometimes are paid weekly.

What’s the Difference Between a Corporation and a Franchise?

The management styles behind a corporation and a franchise are what differentiates the two business models.

What is a Franchise Discovery Day?

What You’ll Find In This Article Can Anyone Attend a Franchise Discovery Day?How to Prepare for Discovery DayWhat Questions Should …

What is the Difference Between Franchising and a Partnership?

What You’ll Find In This Article What is the Definition of a Franchisee?What is the Definition of a Partnership?General PartnershipsLimited …

What is Franchise Insurance?

What You’ll Find In This Article How Does Franchise Insurance Work?Types of Franchise InsuranceProperty InsurancePublic Liability Insurance Product Liability Insurance General Liability …

What is a Franchise License?

What You’ll Find In This Article What is the Difference Between a Franchise and a License?State Licensing RegulationsWhat are the …

How to Become a Franchise Consultant

What You’ll Find In This Article What Does a Franchise Consultant Do?What are the Qualifications to be a Franchise Consultant?Steps …

What is the Difference Between Franchising and Company Owned?

What You’ll Find In This Article What is the Definition of Franchising?What is the Definition of a Company Owned Store?What …

What is an Area Representative?

What You’ll Find In This Article What is the Difference Between Area representatives and Master franchisors? How a Franchise Area Developer …

What is the Difference Between Franchising and Opening a Small Business?

What You’ll Find In This Article What is the Definition of a Franchise?What is the Definition of Small Business?What is …

How to Open a Gym Franchise

What You’ll Find In This Article What are the Benefits of Owning a Gym Franchise?Starting a Gym FranchiseHow Much Does …

COVID-19’s Effect on the Health and Beauty Industry

The health and beauty industry had a crucial role in protecting citizens during COVID-19. Find out how the coronavirus hit the health and beauty industry and how it bounced back!

How the Franchise Model Works

To enjoy the benefits of the franchise model, it’s essential to understand the different types of franchise models and how they work.

How to Evaluate Franchise Opportunities

Is this franchise opportunity right for you? We’ll explore the steps to evaluating a franchise opportunity, and how to decide between an established or emerging franchise.

How to Become a Franchise Owner

Investing in a franchise is a great way to start your own business. We will explore how to become a franchise owner and break down the paths to, risks, and benefits of owning your own franchise.

How to Reduce Your Carbon Footprint In Business

Running a business is one thing, but running an ecologically friendly business while staying profitable takes things to the next level. Here’s a short guide on how to reduce your carbon footprint in business.

The Differences Between a Chain and a Franchise

We break down the differences between a chain vs a franchise, so you can figure out which business is best for you.

How to Create a Franchise Business Plan

Understand why a franchise business plan can make or break your business and how to create a franchise business plan.

How Much Do Franchise Owners Make

Have you ever wondered how a franchise owner makes money? Is the risk worth the investment? Find out how franchisees get paid in our guide.

How to Get a Loan for a Franchise

To succeed at their new business, franchisees will need to have a steady cash flow and franchise financing options to ride the waves of the initial economic storm.

What’s the Difference Between a Franchise and a License?

While licensing is a broad term that encapsulates franchising, there are several licensing agreements available to prospective firms.

What You’ll Find In This Article