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The Value of a Franchise Insurance Program with a Large National Carrier for a Home Services Franchise

Business Overview

Imagine "Ace Plumbing Solutions," a growing franchise specializing in plumbing services, including emergency repairs, installations, and maintenance for residential and commercial clients. Ace Plumbing Solutions operates numerous franchise locations across several states.

The Scenario

A major pipe bursts in a high-rise apartment building serviced by an Ace Plumbing Solutions franchisee. The incident results in significant water damage to multiple apartments and common areas. Several tenants file claims against the franchisee, alleging property damage and seeking compensation for temporary relocation and repairs.

Value of a Franchise Insurance Program with a Large National Carrier

Standardized Coverage Across All Locations

Consistency and Comprehensive Protection: Ace Plumbing Solutions has a franchise insurance program with Rikor Insurance Consultancy, which partners with a large national carrier. This program ensures all franchise locations have standardized and comprehensive insurance coverage, including:

  • General Liability Insurance: Covers third-party claims of property damage and bodily injury, protecting the franchisee from legal and financial repercussions of the water damage incident.

  • Commercial Property Insurance: Covers damage to the franchisee’s own property and equipment affected by the incident, ensuring quick repair or replacement.

  • Business Interruption Insurance: Provides compensation for lost income and ongoing expenses if the franchisee needs to halt operations temporarily due to the extensive damage.

Access to Specialized Coverage Options

Tailored to the Plumbing Industry: The large national carrier offers specialized coverages essential for plumbing operations, ensuring all potential risks are addressed:

  • Professional Liability Insurance (Errors & Omissions): Protects against claims of negligence or inadequate work, particularly important in the plumbing industry where improper installations or repairs can lead to significant damages.

  • Equipment Breakdown Insurance: Covers the cost of repairing or replacing critical plumbing tools and equipment that might have been damaged or compromised during the incident.

  • Commercial Auto Insurance: Ensures that vehicles used for transporting equipment and staff to job sites are protected, covering damages or accidents that occur during increased activity following the incident.

Real-World Impact

Efficient Claims Handling and Risk Mitigation: Due to the franchise insurance program with a large national carrier, Ace Plumbing Solutions can efficiently manage the aftermath of the water damage incident:

  1. Quick and Effective Claims Processing: The national carrier’s extensive resources and streamlined processes ensure that claims are handled promptly. The general liability coverage addresses tenant claims for property damage and relocation expenses, minimizing financial strain on the franchisee.

  2. Financial Stability and Business Continuity: Business interruption insurance provides crucial support, covering lost income and helping the franchisee manage ongoing expenses while repairs are made. This ensures the franchisee can maintain financial stability and continue paying employees during the downtime.

  3. Access to Expert Risk Management Services: The large national carrier provides risk management services, including loss prevention and safety training. These services help the franchisee implement best practices and reduce the likelihood of future incidents, enhancing overall operational safety and efficiency.

  4. Comprehensive Legal and Financial Protection: Professional liability insurance protects the franchisee from potential lawsuits alleging negligence or inadequate repairs. This coverage helps cover legal fees and any settlements, protecting the franchisee's financial health and reputation.


The real-world example of Ace Plumbing Solutions highlights the significant value of having a franchise insurance program with a large national carrier. Through their partnership with Rikor Insurance Consultancy and the national carrier, Ace Plumbing Solutions ensures that all franchisees have standardized, comprehensive, and specialized coverage tailored to the unique risks of the plumbing industry. This protection provides financial stability, operational continuity, and peace of mind, enabling the franchise to manage risks effectively and focus on growth and customer satisfaction.

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