In my world, AI has always meant one thing: Additional Insured. It is the endorsement that puts your brand's name inside a franchisee's policy so their coverage defends you when a customer sues. So the first time someone asked me if "AI" could verify a franchisee's insurance, my brain went to the wrong place. Now it means both. Artificial intelligence, checking whether the Additional Insured is actually there. That is a funny place to end up, and it is also the whole point of this article....

Most franchisors have no real answer to this. A franchisee's coverage lapses, or a required endorsement falls off, and the brand sends an email, then another email, and then nothing. That is not enforcement. That is hoping. Franchise insurance non-compliance is not a paperwork problem you nag your way out of. It is a series of decisions, each one with legal and financial weight, and if you have not decided the ladder in advance, you will improvise it at the worst possible moment. Here is what...

You make every franchisee carry insurance. You probably require a lot of it. General liability. Workers' comp. Commercial auto. Maybe professional liability, an umbrella, cyber, EPLI. Then you collect a certificate for each one, drop it in a folder, and check the box. So here is the question that matters. Do you actually know if any of that insurance would pay when something goes wrong? Most franchisors do not. They have a stack of certificates and almost no idea what is behind them. That...