Tips for Choosing a Franchise Policy
Thinking about purchasing a franchise? Or do you already own a franchise but would like more options when it comes to insurance? Not only is insuring a franchise different from insuring other types of business entities, but there are special considerations when evaluating your options. Following are some things to think about when purchasing a franchise policy or renewing your existing coverage:
- Obtain a copy of the franchise insurance requirements from the Uniform Franchise Offering Circular and fax it to your insurance agent for a quote prior to purchase. Compare it to the insurance provided by the franchise, to determine which provides the best coverage and price. One of the benefits of working directly with an agent is the ability to purchase the exact type of coverage suited to your specific needs.
- Find out in advance if you are able to purchase insurance independently or if it must be included in the franchise package. Obtain proof in writing, and always have the new policy in place prior to dropping existing coverage. If you obtain insurance elsewhere, be sure to send proof of coverage to the franchise in a timely manner.
Consider additional policies. Even if the franchise is fully insured, many business owners find additional liability protection to be an excellent investment. It provides an added layer of protection against lawsuits and liability, and it is an important part of your financial planning portfolio to ensure that personal assets are safe and secure. Other important forms of insurance include flood, loss of business use and key man coverage.