CONTE insurance brokers
Franchisor Liability
The business of owning a Franchise Group of Companies is an extremely complex exercise, especially due to the constantly changing nature of laws imposed by Government Legislation and Industry Regulators. It is essential that an Insurance program is specifically tailored for Franchisors, and especially when it comes to ensure their potential liabilities are correctly covered. For example, it is important that Professional Indemnity and Management Liability are insured under the one policy to ensure maximum protection, and limits the possibility of demarcation suits when two different insurers hold the insured’s Professional Indemnity and Management Liability insurance policies.
One of the major exposures for any franchisor relates to a potential breach of contract (Franchise Disclosure Agreement) between franchisor and franchisee. This is a very real and high exposure and can result in potential class action from franchisees. The types of contract breaches covered under this policy are:
a) All marketing activities undertaken by the Insured in connection with the sale of franchises;
b) The sale of franchises including the preparation, change, renewal or registration of:
i. a Franchise Agreement; and/or
ii. a franchise disclosure document as required by the Franchise Code of Conduct or similar instrument.
c) Compliance with Federal and State law in relation to the Franchise Agreement
d) The development and monitoring of compliance standards, specifications and operating procedures for franchises
e) The service, training, advertising and assistance required to be provided by the company to a franchisee under the terms of a franchise agreement or as required by the Franchising Code of Conduct of as represented in any disclosure document provided in relation to the franchise.
f) The sale, transfer or termination of a franchise or the assets of a franchise.
g) The negotiation or approval of a lease for the location of a franchise.
h) The selection or approval of a operational site for a franchise.
In addition to this, the Management Liability component of the policy provides cover for the personal liabilities of the Management tean of Vast Interior, including but not limited to:
· Directors and Officers Liability
· Company Reimbursement
· Company Cover
· Employment Practices Liability
· Fidelity Guarantee
· Superannuation Trustees
· Fines and Penalties
We strongly recommend consideration to this form of protection and would be happy to work through the benefits and requirements of effecting such insurance.
