FIVE STAR PAINTING

This page covers what Five Star Painting requires, where that requirement ends, and what the operation actually needs to protect what you built.

The Five Star Painting franchise agreement requires all insurance to be placed with carriers rated A-VIII or better by AM Best. Those carriers must be admitted in your state. Every certificate of insurance you issue must include 30 days' prior written notice by certified mail to the franchisor before any cancellation or material change.

General liability — written on an occurrence form — must carry a minimum of $1,000,000 per occurrence and $2,000,000 policy aggregate. The policy must include products and completed operations coverage and personal injury coverage. The additional insured required by your franchise agreement is Five Star Painting Franchisor — confirm the exact entity name from your specific agreement before issuing any certificate. That entity must appear on the additional insured endorsement on a primary and non-contributory basis, meaning your policy responds before any policy the franchisor carries. A waiver of subrogation in favor of Five Star Painting Franchisor and its parents, subsidiaries, officers, directors, and agents is required on the general liability policy.

Commercial auto must carry a combined single limit — one number covering both bodily injury and property damage — of $1,000,000. The policy must cover owned vehicles, hired vehicles, and non-owned vehicles. Service vans in your name, rented vehicles, and any crew member's personal vehicle used on a job are all in scope. The same additional insured and waiver of subrogation requirements apply here.

Workers' compensation is required at the statutory level your state mandates. Employers' liability — the portion of the workers' compensation policy that covers claims outside the statutory system — must be at $1,000,000 per accident, $1,000,000 per disease per employee, and $1,000,000 disease policy limit. A waiver of subrogation in favor of Five Star Painting Franchisor is required.

Cyber liability is required at $500,000 per claim and $500,000 in the aggregate. This covers financial losses from unauthorized access, loss, or corruption of data. Five Star Painting's booking and customer management platform collects customer payment data and personal information. The FDD requires this coverage — it is not optional.

The franchise agreement permits you to satisfy required limits through an umbrella policy. That option matters when commercial accounts require per occurrence limits above $1,000,000 — which is common.

Any home built before 1978 may contain lead-based paint. When a painting crew sands, scrapes, or disturbs those surfaces during a repaint — even lightly — lead contamination exposure begins. This is not a rare scenario for a residential painting franchise operating in established neighborhoods. It is a routine job type.

Your general liability policy contains a pollution exclusion. Lead is classified as a pollutant under standard general liability policy language. That exclusion does not distinguish between accidental lead disturbance during a routine interior repaint and an intentional industrial release. The exclusion applies.

If a customer's child tests for elevated blood lead following work at their home, the bodily injury claim that follows gets routed to the pollution exclusion before anything else. The claim is real. The coverage is not there.

The EPA requires contractors who disturb lead paint in pre-1978 homes to hold Renovation, Repair, and Painting certification — called RRP certification. It mandates specific work practices: plastic containment, HEPA vacuuming, and post-work cleaning verification. The fine for a violation is up to $37,500 per infraction. Standard general liability does not cover regulatory fines.

Contractors pollution liability covers bodily injury, property damage, and cleanup costs arising from pollutant releases during contracting operations. It is the coverage that responds when lead paint disturbance produces a bodily injury claim or a contamination cleanup that general liability will not touch. RRP certification reduces your regulatory exposure. It does not restore the general liability coverage the pollution exclusion removed.

Overspray is the most common property damage claim in painting franchises. Aerosol particles from spray equipment, wind drift during exterior work, and spatter from brush application can reach vehicles parked in driveways, adjacent landscaping, and neighboring properties.

Standard general liability covers accidental property damage to third parties. Most overspray claims are in that category and most are covered. The risk is narrower than lead paint but it is real.

Some general liability policies contain an overspray exclusion or a painting-specific property damage limitation as a policy modification. These are not standard, but they appear in lower-cost policies marketed to painting contractors. A policy placed through a generalist agent without reviewing the exclusion language may carry this limitation without the franchisee's knowledge. One email to your agent asking whether your policy contains an overspray exclusion or any painting-specific property damage limitation answers the question. Ask before it matters.

Adjacent property damage follows the same analysis. If overspray from your exterior work lands on a neighbor's vehicle or damages their landscaping, your general liability policy should respond — provided there is no exclusion and the damage was accidental. Intentional overspray and damage from work outside your contracted scope are not covered under any policy.

Five Star Painting advertises a two-year warranty on residential and commercial work. That warranty is a brand differentiator. It is also a coverage question most franchisees have not worked through.

When paint fails at 14 months — adhesion failure, peeling, cracking — the customer calls under the warranty. The franchisee sends a crew back and repaints. That cost is a business expense. General liability does not pay for the cost of redoing your own work. It pays for property damage that results from defective work — not for the work itself.

The distinction matters when the warranty callback involves a professional judgment claim. If the customer alleges the product selected was wrong for the surface, the prep work was inadequate for the substrate, or the specification was professionally incorrect — those claims carry an errors and omissions component. Errors and omissions insurance covers claims arising from professional advice, product specifications, and service failures.

Five Star Painting's color consulting process and its two-year warranty both create this exposure. The warranty tells customers their work is guaranteed for a period that exceeds most completed operations discovery windows. The color consulting process creates a professional advice record. Standard general liability was not written to cover either of those obligations when a claim alleges professional judgment was the cause.

The honest answer: your premium depends on factors specific to your operation that no published estimate can account for. What you can understand is how the number gets built — and what to verify before accepting a quote.

How workers' compensation premium is calculated

Workers' compensation is the most variable line in any painting franchise insurance program. Interior and exterior painters are both classified under NCCI code 5474 — Painting: Buildings, Structures, and Bridges. The classification is the same. The risk that diverges over time is the experience modification.

Your premium is built from a formula every carrier applies:

Your payroll ÷ 100 × your state's rate for NCCI code 5474 × your experience modification = your base premium

The rate for NCCI 5474 varies by state. High-rate states — New York, California, Florida — carry rates that can be two to three times higher than lower-rate states for the same payroll and classification. A painting crew of the same size, in the same franchise, doing the same work will carry a materially different workers' compensation premium depending on where they operate.

Your experience modification starts at 1.0 for new operations. It moves up or down based on your actual claims history compared to similar painting operations in your state. Exterior work — ladder work, scaffolding, elevated surface painting — produces more injury claims over time than interior brush work. Operations that are heavy in exterior work develop higher experience modifications over multiple policy years, which drives the workers' compensation premium upward at every renewal. One significant injury claim can move your modification from 1.0 to 1.25 over three years — a 25 percent increase that follows you at every renewal.

What happens at audit if your subcontractor certificates are missing

Your workers' compensation carrier audits your actual payroll at the end of every policy year. The auditor reviews your W-2 payroll and your 1099 payments to independent contractors and sub painters.

If a 1099 painter cannot produce a certificate of insurance showing their own workers' compensation coverage, your carrier treats their payroll as yours. The audit bill reflects premium on that additional payroll at the NCCI 5474 rate for your state. A sub painter with a lapsed or missing certificate produces the same audit result as a sub with no certificate at all.

Painting franchisees who use sub crews for commercial jobs, peak season overflow, or specialty work should require a current certificate of insurance from every sub painter before work starts — and verify renewal dates before the job begins, not after the audit bill arrives.

The franchise agreement requires general liability, commercial auto, workers' compensation, and cyber liability. Experienced operators in residential and commercial painting markets typically add:

Contractors pollution liability covers bodily injury, property damage, and cleanup costs from lead paint disturbance, solvent fume exposure, and other pollutant releases during painting operations. For any Five Star Painting franchisee doing interior work in pre-1978 residential housing — which describes most residential markets in the Northeast, Midwest, and mid-Atlantic — this is the most important coverage outside the FDD minimum. The general liability pollution exclusion applies regardless of whether the crew holds RRP certification.

Errors and omissions insurance covers claims arising from professional advice, color and product specifications, and service failures where professional judgment is alleged to be the cause. Five Star Painting's color consulting process and its two-year warranty both create professional obligation exposure that standard general liability does not address. Experienced operators in higher-end residential markets and those pursuing commercial accounts carry this coverage because the client profile in those markets is more likely to pursue professional negligence claims when work fails.

Tools and equipment coverage — sometimes called inland marine coverage — covers sprayers, ladders, scaffolding, and other equipment when it is in the van, at a job site, or in temporary storage. Standard commercial property covers equipment at a fixed location. Painting equipment moves with every job. Theft from an unattended service vehicle overnight — $8,000 to $12,000 in spray equipment and tools — falls outside standard commercial property coverage.

Commercial crime coverage — sometimes called employee dishonesty coverage — covers theft by employees from customer property. Painting crews work inside customer homes for multi-day jobs with unsupervised access to rooms the customer is not occupying. The claim frequency is lower in painting than in residential cleaning, but the access pattern is comparable.