VARSITY ZONE

The Varsity Zone franchise agreement names HPB HVAC LLC as the franchisor entity. That is the exact name that must appear as additional insured on your general liability and auto policies. HPB HVAC LLC, along with its subsidiaries, affiliates, and respective officers, directors, members, shareholders, and employees must be named. Confirm the exact entity language from your franchise agreement before issuing any certificate.

The 2025 Varsity Zone FDD requires certificates of insurance at least 30 days before opening. That is the earliest compliance trigger — not after training, not after signing the lease, but 30 days before the doors open. If you are in the pre-opening phase, this deadline matters.

Your certificate of insurance names your business entity as the named insured. The FDD requires you to add HPB HVAC LLC, its subsidiaries, affiliates, and their officers, directors, members, shareholders, and employees as additional insureds on your general liability and commercial auto policies. These parties are protected by your policy for claims arising from your operations — their exact names and the breadth of the additional insured requirement must be verified from your franchise agreement and reflected on every certificate.

What the 2025 Varsity Zone FDD requires you to carry:

Commercial general liability insurance at $1,000,000 per occurrence and $2,000,000 aggregate on an occurrence form. The FDD specifies that coverage includes products and completed operations, personal and advertising injury, fire damage liability, and medical payments. Primary and non-contributory is required. Waiver of subrogation is required.

Commercial auto liability at a combined single limit of $1,000,000 covering all owned, non-owned, and hired vehicles. Physical damage coverage is required for vehicles with deductibles no higher than $1,000.

Workers' compensation insurance at statutory limits. Employers' liability at $1,000,000 per accident, $1,000,000 per disease per employee, and $1,000,000 per disease policy limit.

Umbrella liability following form above general liability, auto, and employers' liability. The FDD excerpt specifies umbrella is required — confirm the required limit from your full franchise agreement.

Contractor's Professional Liability insurance at $1,000,000 — errors and omissions coverage for HVAC professional services. This is FDD-required, not optional. HPB HVAC LLC has explicitly determined that HVAC installation and service work carries professional judgment exposure that the standard general liability policy does not cover.

Employment Practices Liability insurance at $250,000 aggregate, including a third-party endorsement naming the franchisor as co-defendant. This is FDD-required. EPLI responds to employment-related claims — wrongful termination, harassment, discrimination — from employees and (with the third-party endorsement) from customers.

Contractor's Equipment Floater covering the mobile equipment used in the franchised business. This is FDD-required. Tools and equipment in service vehicles, at job sites, and in transit must be covered by an inland marine / equipment floater policy.

Property insurance for 100% of replacement cost of business personal property.

Refrigerant exposure causing bodily injury is the claim scenario where three coverage issues converge — and where the standard general liability policy fails on all three simultaneously.

First, the pollution exclusion. Refrigerants — including R-410A, R-32, and legacy refrigerants — are classified as pollutants under standard general liability policy language. A customer who claims respiratory symptoms or other bodily injury from refrigerant exposure during a service call is bringing a pollution-adjacent bodily injury claim. The standard GL carrier evaluates the pollution exclusion first.

Second, the professional judgment component. If the refrigerant exposure resulted from improper handling — an unsafe recovery method, a fitting released without proper procedure, or a system opened in an occupied space — the customer's attorney will frame part of the claim as a professional negligence allegation. The general liability policy responds to property damage and bodily injury from operations. It does not respond to claims that the method of performing those operations was professionally negligent. That is the territory Contractor's Professional Liability covers — which the Varsity Zone FDD requires.

Third, the EPA regulatory component. Refrigerant handling is regulated under Section 608 of the Clean Air Act. Improper venting of refrigerants is a federal violation carrying fines up to $44,539 per day per violation. The general liability policy does not cover regulatory fines. The bodily injury claim from the same incident and the regulatory fine from the same incident are two separate exposures requiring two separate responses.

Your general liability policy covers operations at both residential and commercial locations. But commercial accounts consistently require more from a certificate of insurance than your franchise agreement minimum — and the gaps matter when the COI request comes back.

Commercial property managers, building owners, and facility directors regularly require $2,000,000 per occurrence for HVAC contractors working in their buildings. The Varsity Zone FDD specifies $1,000,000 per occurrence. The two numbers are not the same, and a commercial account that requires the higher limit will not accept a certificate that shows the lower one.

Commercial accounts also frequently require the building owner or property management company to be named as additional insured on your policy — a separate endorsement from the HPB HVAC LLC requirement in your franchise agreement. These are additive endorsements, not substitutes. Your policy needs to accommodate both.

HVAC franchisees regularly subcontract specialty work — sheet metal fabrication, controls wiring, refrigerant recovery. Each sub carries a certificate on their own renewal schedule. None of them will notify you when it lapses. A subcontractor's error on a commercial job still routes back to your general liability if the sub's certificate cannot be produced. See how subcontractor compliance monitoring works for HVAC franchisees at subcontractor-compliance.

The EPLI third-party endorsement required by the Varsity Zone FDD also becomes relevant on commercial accounts. Third-party employment practices liability covers claims from non-employees — customers, commercial property tenants, or building occupants — who allege discrimination or harassment by your employees. On a multi-unit residential or commercial property with regular customer contact, this exposure is not theoretical.

The Varsity Zone FDD requires more coverage lines than most HVAC franchise agreements — general liability, auto, workers' compensation, umbrella, professional liability, employment practices liability, equipment floater, and property. Each line has its own rating basis and rate structure.

How workers' compensation premium is calculated

Your workers' compensation premium is built from this formula: payroll divided by 100, multiplied by the rate for your NCCI classification code, multiplied by your experience modification factor.

Varsity Zone HVAC work classifies under NCCI code 5537. Rates vary by state — approximately $2.24 per $100 of payroll in lower-rate states and $5.14 in Florida. A Varsity Zone franchisee with $150,000 in annual payroll in a mid-rate state at $3.00 per $100 generates approximately $4,500 in base workers' compensation premium before the experience modification.

If your technicians perform gas line work as part of the HVAC scope, confirm the correct NCCI code at policy inception. Reclassification at audit produces a bill with no ability to negotiate the rate retroactively.

General liability, professional liability, and EPLI

General liability premium is typically built on annual revenue for HVAC operations. Professional liability (E&O) premium is rated on revenue and the scope of professional services performed. EPLI premium is based on headcount and loss history.

The FDD requires the EPLI policy to name HPB HVAC LLC as co-defendant — confirmed by ISO endorsement CG 20 29 or equivalent. This is a specific policy requirement, not a standard EPLI provision. Confirm your EPLI carrier issues the co-defendant endorsement before the certificate is issued.

What the Varsity Zone FDD says about insurance costs

The 2025 Varsity Zone FDD estimates initial insurance costs at $5,000 to $7,500 for 90 days. That figure reflects an initial deposit for pre-opening coverage — not the full annual operating cost of a complete Varsity Zone insurance program that includes all FDD-required lines. Annual operating costs will be higher once workers' compensation, professional liability, EPLI, and the equipment floater are fully priced.

The five variables that determine your actual number

Your state. Your payroll. Your fleet. Your claims history. Your subcontractor use.

Insurance premium for a Varsity Zone franchise is not a single number. Your state, your zip code, your payroll, your fleet, and your claims history all move it. A quote built for your operation, your state, and your specific service lines is the only number that applies.

The Varsity Zone FDD already requires more than most HVAC franchise agreements. These additional coverages address exposures that the FDD requirements do not fully close.

Contractors pollution liability addresses refrigerant releases, carbon monoxide exposure, and gas incidents that the standard general liability pollution exclusion removes. The FDD requires professional liability and EPLI — it does not specifically require contractors pollution liability. But HVAC work with refrigerant and gas systems creates pollution exposure that the standard GL does not cover. Contractors pollution liability closes that gap.

Higher umbrella limits above the FDD requirement. The FDD requires umbrella coverage but does not specify a dollar amount in the excerpt available. For a Varsity Zone franchisee building commercial accounts, confirming that umbrella limits satisfy commercial COI requirements — commonly $2,000,000 or more — is worth doing before a commercial account presents a certificate request you cannot satisfy.