HVAC · HORSEPOWER BRANDS
VARSITY ZONE
FRANCHISE
INSURANCE
Most HVAC franchise agreements require general liability, commercial auto, and workers' compensation. The Varsity Zone FDD requires those — and also requires Contractor's Professional Liability at $1,000,000 and Employment Practices Liability insurance at $250,000.
That is not a coincidence. It reflects that HPB HVAC LLC — the Varsity Zone franchisor entity — has thought through the professional judgment exposure of HVAC installation and service work and decided the standard policy stack is not sufficient protection for their system.
The franchisees who read those requirements carefully and build their program around what the FDD actually says are protected. The franchisees who buy the minimum general liability, auto, and workers' comp and assume that satisfies the FDD are not compliant — and are not covered for the exposures the franchisor specifically identified.
This page tells you exa
ctly what the Varsity Zone FDD requires, what it means in practice, and where the coverage stack protects you.
HPB HVAC LLC
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COMPLIANCE REQUIREMENTS
REFRIGERANT EXPOSURE CLAIMS
COMMERCIAL ACCOUNTS
COMMERCIAL CONTRACTS
PREMIUM CALCULATION
BEYOND THE MINIMUM
FDD REQUIREMENTS
FAQs
$1,000,000 per occurrence / $2,000,000 aggregate
GL REQUIRED
$1,000,000 combined single limit
AUTO REQUIRED
$1,000,000 each accident
WC EMPLOYERS LIABILITY
Required
UMBRELLA
$1,000,000 — Contractor's E&O
PROFESSIONAL LIABILITY
ON THIS PAGE
COMPLIANCE REQUIREMENTS
REFRIGERANT EXPOSURE CLAIMS
COMMERCIAL ACCOUNTS
COMMERCIAL CONTRACTS
PREMIUM CALCULATION
BEYOND THE MINIMUM
FDD REQUIREMENTS
FAQs
COMPLETE INSURANCE PROGRAM
SUBCONTRACTOR CERTIFICATE COMPLIANCE ACROSS YOUR FRANCHISE
Most home service franchisees use independent contractors or 1099 workers at some point. The coverage gap this creates is not obvious until a claim surfaces — and by then, the conversation is about who pays rather than what was preventable.
A lapsed subcontractor certificate is invisible until your carrier finds it. When they do, they invoke the subcontractor exclusion in your general liability policy. The work was done. The damage is real. The coverage is not there.
Rikor's subcontractor compliance monitoring tool tracks subcontractor certificates in real time. When a certificate lapses, you know before the next job starts — not after the claim comes in. See how it works for HVAC franchisees →
FRANCHISEE QUESTIONS
FREQUENTLY ASKED QUESTIONS
WHAT INSURANCE DOES A VARSITY ZONE HVAC FRANCHISE NEED TO OPEN?
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The 2025 FDD requires general liability at $1,000,000 per occurrence / $2,000,000 aggregate, commercial auto at $1,000,000, workers' compensation with $1,000,000 employers' liability, umbrella (confirm limit from full FDD), Contractor's Professional Liability at $1,000,000, Employment Practices Liability at $250,000, an equipment floater, and property insurance. Certificates are required 30 days before opening.
WHO NEEDS TO BE LISTED AS ADDITIONAL INSURED ON MY VARSITY ZONE POLICY?
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HPB HVAC LLC, along with its subsidiaries, affiliates, and their respective officers, directors, members, shareholders, and employees. Confirm the exact entity language from your franchise agreement. Each certificate of insurance must reflect the correct additional insured parties.
WHY DOES VARSITY ZONE REQUIRE CONTRACTOR'S PROFESSIONAL LIABILITY (E&O)?
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HPB HVAC LLC specifically identified HVAC professional judgment exposure — installation specifications, system sizing decisions, service recommendations — that the standard general liability policy does not cover. Contractor's Professional Liability responds to claims that your professional work or advice was negligent. The FDD requires it because the exposure is real and unaddressed by standard GL alone.
WHAT IS EMPLOYMENT PRACTICES LIABILITY AND WHY DOES VARSITY ZONE REQUIRE IT?
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Employment Practices Liability covers employment-related claims — wrongful termination, harassment, discrimination — from your employees and (with the third-party endorsement the FDD requires) from customers and third parties. The franchisor co-defendant requirement means HPB HVAC LLC is protected if a claimant names both the franchisee and the franchisor. This endorsement must be confirmed with your EPLI carrier before the certificate is issued.
WHAT IF A CUSTOMER GETS SICK FROM REFRIGERANT EXPOSURE DURING A REPAIR?
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Refrigerant is classified as a pollutant under standard general liability policy language. Bodily injury from refrigerant exposure may trigger the pollution exclusion on standard GL. Contractors pollution liability is the policy designed to respond to this exposure. The professional judgment component of the claim — whether handling procedures were adequate — falls within the Contractor's Professional Liability policy the FDD requires.
DOES MY VARSITY ZONE POLICY COVER ME ON COMMERCIAL PROPERTIES?
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Yes, but commercial accounts often require $2,000,000 per occurrence — higher than the FDD minimum. They may also require the property manager named as additional insured. Confirm your limits and endorsements match each commercial account's COI requirements. Build the limits for commercial work into your program from the start.
WHAT IS AN EQUIPMENT FLOATER AND WHY DOES THE FDD REQUIRE IT?
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An equipment floater (inland marine policy) covers your HVAC tools and equipment — refrigerant recovery units, diagnostic equipment, specialty tools — when they are in service vehicles, at job sites, or in transit. Standard commercial property coverage does not apply off-premises. The FDD requires this because HVAC franchisees carry significant equipment investment in mobile operations.
WHAT DOES THE VARSITY ZONE FDD SAY ABOUT INSURANCE COSTS IN ITEM 7?
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The 2025 FDD estimates initial insurance costs at $5,000 to $7,500 for 90 days — an initial deposit figure, not the full annual operating cost. Annual costs for the complete FDD-required coverage stack will be higher once all lines are fully priced.
WHAT IS THE NCCI WORKERS' COMPENSATION CODE FOR VARSITY ZONE HVAC TECHNICIANS?
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HVAC installation and service classifies under NCCI code 5537. Rates vary by state from approximately $2.24 to $5.14 per $100 of payroll. Gas line work may trigger a separate classification in some states — confirm with your carrier at inception.
DOES MY VARSITY ZONE POLICY COVER SUBCONTRACTORS OR 1099 WORKERS?
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Only if the subcontractor exclusion has been modified to require current certificates. For 1099 workers, both the financial audit exposure and the potential direct injury liability apply. Collect certificates before every job. Both risks disappear with a current certificate in hand.
WHAT DOES THE EPLI CO-DEFENDANT REQUIREMENT MEAN IN PRACTICE?
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When a claimant names both your franchise entity and HPB HVAC LLC in an employment practices lawsuit, the EPLI policy must be written to respond on behalf of both parties. ISO endorsement CG 20 29 or its equivalent achieves this. Confirm your EPLI carrier issues this endorsement — it is not a standard provision and must be specifically requested.
WHAT IS THE EQUIPMENT PHYSICAL DAMAGE REQUIREMENT IN THE FDD?
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The FDD requires physical damage coverage on vehicles with a maximum deductible of $1,000. This means your commercial auto policy must include comprehensive and collision coverage on covered vehicles — not just liability — with deductibles at or below $1,000. Confirm this on your commercial auto declarations page.
What a complete Varsity Zone franchise insurance program looks like
Six things that define a program built to the FDD specification — not a minimum-compliance policy.
The Contractor's Professional Liability policy is FDD-required. An HVAC policy stack that does not include it is non-compliant with the Varsity Zone franchise agreement — and unprotected for the professional judgment exposure the franchisor specifically identified as a required coverage.
The Employment Practices Liability policy must include the third-party endorsement naming HPB HVAC LLC as co-defendant. A standard EPLI policy without this endorsement does not satisfy the FDD requirement. Confirm the endorsement with your EPLI carrier before issuing any certificate.
The equipment floater must cover mobile equipment in service vehicles and at job sites. Standard commercial property coverage does not apply off-premises. Confirm the equipment floater is on your program — it is required, not optional.
Certificates must be issued 30 days before opening. This is one of the earliest pre-opening compliance triggers in the HVAC franchise category. Build the insurance program timeline into your pre-opening schedule.
Commercial accounts require higher limits than the FDD minimum in most markets. The policy that satisfies HPB HVAC LLC and the policy that wins commercial service contracts are not the same policy without intentional limit-setting. Build for commercial accounts from the start.
Contractors pollution liability is not in the Varsity Zone FDD requirements — but refrigerant and gas line work in residential HVAC is pollution exposure that the standard GL does not cover. The FDD required the professional liability policy because it saw a real gap. The same logic applies here.
SUBCONTRACTOR RISK
A LAPSED SUB CERTIFICATE IS INVISIBLE UNTIL YOUR CARRIER FINDS IT
Most home service franchisees use independent contractors or 1099 workers at some point. The coverage gap this creates is not obvious until a claim surfaces. When a certificate lapses, your carrier invokes the subcontractor exclusion in your general liability policy. The work was done. The damage is real. The coverage is not there.
Rikor's subcontractor compliance monitoring tool tracks subcontractor certificates in real time. When a certificate lapses, you know before the next job starts — not after the claim comes in.
WADE MILLWARD, CIC
Founder & CEO · Rikor Insurance
Wade Millward has spent 18 years specializing in franchise insurance. He holds the Certified Insurance Counselor (CIC) designation and has reviewed hundreds of franchise disclosure documents across home service, food service, and commercial franchise verticals. He has built coverage programs for Authority Brands franchisees across electrical, HVAC, plumbing, and restoration trades.