Franchise (Commercial Insurance)
Franchises need business insurance too. In fact, it’s one of the things that’s most often overlooked by people buying into franchises, even though risk mitigation is an important component of every successful business model. Insurance, the right kind of insurance, is the perfect example of risk mitigation.
It is important to note that some franchisors require individuals who are purchasing franchises from them to purchase certain types of insurance products. That does not mean that the insurance you purchase to meet their minimum standards are the only types of insurance your franchise business.
The franchisors, after all, are primarily concerned with the success of the brand and not necessarily the success of your individual business. The insurance products they require you to purchase in your role as a franchisee are about protecting their interests. You need to consult with an independent agency, like
Phoenix Insurance Group to ensure that your insurance needs are being met above and beyond the minimal requirements of your agreement with the franchisor.
Franchise Businesses that Need Insurance
Franchise businesses are available in practically every imaginable business from house cleaning services to auto repairs and a wide range of other businesses including:
- Retail Shops
- Coffee Shops
- Jewelry Shops
- Accounting Services
- Furniture Sales or Rentals
- And more!
Whatever franchise you buy into, it’s important to make sure you protect your investment with appropriate and adequate insurance coverage. Phoenix Insurance Group can help with that.
What Types of Insurance Do Franchise Business Owners Need?
Depending on the type of franchise business you’ve purchased you may have special needs when it comes to insurance. While most franchisors will require you to purchase insurance that is unique or specific to the industry served, it never hurts to conduct an insurance audit in order to make sure something important wasn’t overlooked or lost in translation.
For instance, many franchises are related to the food service industry. If you purchase a yogurt franchise business, in addition to the typical liability and building coverages, you’d also need to invest in food spoilage insurance, equipment breakdown insurance, and umbrella liability coverage in case something goes wrong and people get sick from eating your yogurt. Those are some of the industry-specific insurance needs for restaurant franchises, but hardly representative of all the types of coverage a franchise owner needs.
These are some of the standard insurance products your franchise business, of almost any kind, will need:
Business Owner’s Policy (BOP). This is a general policy that covers a few standard insurance coverages most businesses share such as business property coverage, inventory coverage, business interruption insurance, and general liability insurance.
Workers’ Compensation Insurance. This coverage is required of businesses operating in the state of New Jersey that have employees.
Umbrella Liability Insurance. Umbrella liability coverage kicks in when standard liability coverage for the year has been maxed out to provide an additional buffer before legal costs and/or settlements and awards attach to business and/or personal assets.
Errors and Omissions Insurance. This is particularly important if your business is a service related business.
Commercial Auto Insurance. If your business has vehicles for delivery or any other purpose, then you need commercial auto insurance. If employees drive their own vehicles for delivery or other purposes, you should consider purchasing non-owned vehicle liability coverage in order to protect business assets and interests if the employee’s liability coverage is inadequate.
Helping you get the right coverage at the right price is what we do. Call 908-879-6500 today to learn how we can serve your Central or North New Jersey franchise operation’s insurance needs or to discuss your current protection to see if it is adequate.