Like all types of businesses, franchises typically need several types of insurance coverage. What makes franchises unique, however, is the complex business relationship between the franchisor and their franchisees. In addition to this contractual relationship, franchise owners also have to navigate dealing with customers and shareholders. This complex network presents numerous opportunities for disputes and potentially even lawsuits. Thus, franchisors in New Jersey need a reliable partner like Blue Lion Insurance Advisors, LLC. Learn more about the different types of franchisor insurance coverage.
What Is Franchise Insurance?
Franchises require tailored business insurance coverage that covers them when unexpected losses happen because of lawsuits, natural disasters, property damage, or other issues. Common types of insurance coverage that franchisors use include:
General Liability Insurance
Any type of franchise runs the risk of being sued by a third party, whether it is a customer, vendor, or competitor. Whether or not your franchise is found liable, you will likely incur legal fees. Commercial general liability insurance covers a range of potential issues that can damage your business, such as copyright infringement, property damage, or bodily injury.
Professional Liability Insurance
Franchisors may be at risk because of mistakes or errors committed by their franchisees, landlords, vendors, or other third parties. Professional liability insurance, also known as errors and omissions (E&O) insurance, offers protection against allegations of negligence that may have been committed by those giving advice or recommendations to customers.
Directors and Officers Insurance
This is another type of franchisor liability insurance that specifically deals with the company’s officers and executive-level employees. Typically, directors & officers insurance (D&O) can cover the costs of legal defense for board members and employees (as well as their spouses) if they are sued.
Property Insurance
Regardless of your industry, your franchise business may be at risk of damage caused by vandalism, theft, fire, or extreme weather events. Business property insurance is a type of commercial insurance coverage designed to offset the costs of repairs or replacement. Property insurance may cover your equipment, furniture, supplies, computers, documents, and other related items.
Note: Supplemental policy coverage may be needed for damage caused by floods or earthquakes.
Cybersecurity Insurance
Bad actors can infiltrate your computer networks when you least expect it. Malware, viruses, or phishing attacks can result in the loss of data and expose sensitive information. Cyber insurance can help you cover lost income while you recover from these attacks, as well as cover associated legal fees.
Franchisors may also want credit insurance to protect against bad debts if any customers default on payments or declare bankruptcy.
Factors that Affect Your Policy
The professionals at Blue Lion Insurance Advisors, LLC, understand that each franchise business is unique. Our insurance advisors are well-versed in the various types of coverage available to franchisors and gain an in-depth understanding of your company. We consider factors such as:
- Your business location
- Number of employees
- Scope of work you perform
- Your products or services and their inherent risk factors
- Equipment or vehicles operated by your employees
- The demographics of the customers you serve
- Your data storage practices and other cybersecurity considerations
For atypical or specialized types of franchises, we can recommend industry-specific coverage.
Customized Policies that Suit Your Needs
Blue Lion Insurance Advisors, LLC, knows that franchisors often choose to offer preferred insurance programs to their franchisees. We understand that you want to provide all your franchisees with the same level of quality, potential cost savings, and coverage. That is why we offer franchise insurance programs that are tailored to your specific industry, operations, and risk factors.
We are proud to develop long-term relationships with our clients and their franchisees and are always happy to field questions regarding your coverage terms and conditions. We’ll stay in touch with you and help you update your coverage as needed, staying abreast of any changes in your industry or the insurance market.
Choose Our Insurance Advisors for Personalized Guidance
See why commercial clients have selected Blue Lion Insurance Advisors, LLC, for more than a century. As independent brokers, we put your interests first. Our insurance advisors help clients select coverage from a range of trusted insurance companies so you can find the best policies for your business. To learn more about franchisor insurance coverage in NJ, call us at 732-860-2611 or contact us today.