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.
(Ord. 1354 § 12.1, 1997)
A.
On or
before commencement of franchise operations, the grantee shall obtain
policies of liability, workers' compensation and property insurance
from appropriately qualified insurance companies, which shall be admitted
in the state of California.
B.
The
policy of liability insurance shall:
1.
Be
issued to grantee and name grantor, its officers, agents and employees
as additional insureds;
2.
Indemnify
for 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:
3.
Provide
a combined single limit for comprehensive general liability and comprehensive
automobile liability insurance in the amount provided for in the franchise
agreement. Such insurance policy shall be subject to review by grantor's
legal counsel; and
4.
Be
noncancellable without thirty days prior written notice thereof directed
to grantor.
C.
The
policy of workers' compensation insurance shall comply with the laws
of the state of California.
D.
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 of any risk covered
by this insurance.
E.
Grantee
shall file with grantor prior to commencement of franchise operations
a certificate of insurance for each of the required policies executed
by the company issuing the policy or by a broker authorized to issue
such a certificate, certifying that the policy is in force and providing
the following information with respect to such policy:
1.
The
policy number;
2.
The
date upon which the policy will become effective and the date upon
which it will expire;
3.
The
names of the named insureds and any additional insured required by
the franchise agreement;
4.
The
subject of the insurance;
5.
The
type of coverage provided by the insurance; and
6.
The
amount or limit of coverage provided by the insurance.
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If the certificate of insurance does not provide all of the
above information, grantor reserves the right to inspect the relevant
insurance policies.
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F.
Conduct
of franchise operations shall not commence until grantee has complied
with the aforementioned provisions of this section.
G.
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 only 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. 1354 § 12.2, 1997)
