5.52.090 Indemnification and insurance requirements.
A. Hold Harmless. Grantee shall indemnify, defend and hold grantor, its officers, agents and employees harmless from any liability, claims, damages, costs or expenses, to the extent provided in the franchise agreement.
B. Insurance.
1. On or before commencement of franchise operations, the grantee shall furnish to grantor certificates of insurance for liability, workers’ compensation and property insurance from appropriately qualified insurance companies, which shall be admitted in the state of California. The certificates of insurance shall provide that the insurance is in force and will not be canceled or modified without thirty days prior written notice to grantor. The certificates of insurance shall be in a form satisfactory to grantor. The grantee shall maintain at its cost throughout the term of the franchise, the insurance described in this section and in the franchise agreement.
2. The policy of liability insurance shall:
a. Name grantor, its officers, agents and employees as additional insureds;
b. Indemnify all liability for personal and bodily injury, death and damage to property arising from activities conducted and premises used pursuant to this chapter by providing coverage therefor, including but not limited to:
i. Negligent acts or omissions of grantee, and its agents, servants and employees, committed in the conduct of franchise operations, and/or
ii. Use or motor vehicles;
c. Provide a combined single limit for comprehensive general liability and comprehensive automobile liability insurance in the amount provided for in the franchise agreement.
3. The policy of workers’ compensation insurance shall comply with the laws of the state.
4. The policy of property insurance shall provide fire insurance with extended coverage on the franchise property used by grantee in the conduct of franchise operations in an amount adequate to enable grantee to resume franchise operations following the occurrence or any risk covered by this insurance.
The certificates of insurance shall indicate the following information:
a. The policy number;
b. The date upon which the policy will become effective and the date upon which it will expire;
c. The names of the named insureds and any additional insured required by the franchise agreement;
d. The subject of the insurance;
e. The type of coverage provided by the insurance; and
f. The amount or limit of coverage provide by the insurance.
If the certificates of insurance do not provide all of the above information, grantor reserves the right to inspect the relevant insurance policies.
5. The commencement of franchise operations shall not begin until grantee has complied with the aforementioned provisions of this section.
6. In the event grantee fails to maintain any of the above-described policies in full force and effect, grantor shall, upon forty-eight hours notice to grantee, have the right to procure the required insurance and recover the cost thereof from grantee. Grantor shall also have the right to suspend the franchise during any period that grantee fails to maintain such policies in full force and effect. In order to account for increases in consumer prices, no more than once during any five year period, grantor shall have the right to order grantee to increase the amounts of the insurance provided in the franchise agreement. Such order may be made by grantor after conducting a duly noticed public hearing. Increases in insurance coverage shall be based upon current prudent business practices of like enterprises involving the same or similar risks. (Ord. 98-09 § 1, 1998)