Before your franchisor signs off — and before your policy leaves a compliance gap that reads as default — walk your FDD’s insurance section against this checklist. It’s the same review we run when a franchisee sends us their FDD. Get multiple quotes within minutes and we’ll do it with you.
The coverage checklist
- General liability limits meet or exceed the FDD minimum (commonly $1M per occurrence / $2M aggregate) — confirm per-location application
- Franchisor named as additional insured — with primary and non-contributory wording if the agreement demands it
- Waiver of subrogation in the franchisor’s favor endorsed onto liability and workers’ comp where required
- Workers’ compensation active per your state — and per the brand, which often requires it even where state law wouldn’t
- Liquor liability if you pour — at the limits the FDD specifies, not just what the state expects
- Property at replacement cost including brand-required signage and buildout, with business interruption where mandated
- Umbrella/excess filling any gap between base policies and the FDD’s required totals
- Auto or hired & non-owned auto if anything gets delivered in anyone’s vehicle
The paperwork checklist
- Certificate of insurance issued before opening, matching the FDD’s wording exactly — brand reviewers reject paraphrases
- Certificate holder and notice-of-cancellation provisions set as the agreement specifies
- Renewal certificates delivered before expiration — a lapse in paperwork reads like a lapse in coverage
- Every location listed, every entity name exact — LLC mismatches are the most common rejection we see
When the checklist finds a gap
Most gaps are endorsement-level fixes, not new policies — an additional-insured form, a subrogation waiver, an umbrella layer. Send us your FDD’s insurance section and current certificates and we’ll reconcile them line by line: see the full franchise restaurant insurance guide, what drives franchise costs, and multi-unit programs.
Frequently asked questions
What happens if my COI doesn’t match the FDD wording?
Brand compliance reviewers typically reject it and the clock keeps running toward your opening or renewal deadline. Matching the certificate to the agreement’s exact language the first time is the entire game.
Who checks my insurance — the franchisor or the state?
Both, differently: the state enforces workers’ comp and licensing rules, while the franchisor’s compliance team enforces the FDD — usually by reviewing your certificate before opening and at every renewal.
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