Buying a Franchise in Ireland: Checking Insurance Terms

Insurance can look like a routine item on a franchise start-up checklist. Yet an agreement may require cover that is expensive, difficult to obtain or narrower than the risks you will carry. Before buying into Ireland’s franchising community, ask an insurance broker to review the proposed requirements alongside your actual business activities. This guide concerns the Republic of Ireland; Northern Ireland has a different legal framework.

Separate contractual requirements from legal duties

The Republic of Ireland has no dedicated franchise legislation, statutory franchise-specific pre-sale disclosure regime or general requirement to register franchise agreements. General contract law, applicable Irish and EU competition law, intellectual property law and other relevant laws govern the relationship. Insurance obligations can therefore arise from your franchise contract as well as laws applying to particular activities.

Do not assume every policy listed by a franchisor is legally compulsory. Equally, a short contractual list does not establish that you have met every legal requirement. For example, compulsory motor insurance requirements may apply where vehicles are used, while particular regulated activities can have their own insurance conditions.

Ask your solicitor and broker to distinguish:

• Cover required by law for your proposed activities.
• Cover required by the franchise agreement, premises lease or finance documents.
• Additional cover recommended for risks your business will face.

The Irish Franchise Association’s ethical code applies to its members, but it is not legislation or an insurance guarantee. Membership does not establish that a particular policy will protect your business.

Turn the insurance clause into a quotation brief

Obtain the full insurance clause and any separate schedule before requesting quotations. If the agreement refers to requirements in another document, obtain that document too. A broker cannot accurately assess an obligation described only as “adequate insurance”.

Create a schedule recording each required policy, its minimum limit, required endorsements, excess and renewal evidence. Ask whether limits apply to each claim or to all claims during the policy period. A shared annual limit can be reduced by earlier claims.

Depending on the business, relevant policies might include public liability, employers’ liability, product liability, professional indemnity, property, business interruption or cyber cover. These are not interchangeable, and not every franchise needs the same combination.

Give the broker a precise description of what you will do. Include deliveries, work at customers’ premises, online sales, services involving advice, subcontractors and any unusual equipment. A policy arranged for a conventional shop may not adequately address additional activities.

Check the proposed policyholder’s legal name and all trading locations. If the franchisor requires its interest to be noted or wants additional insured status, ask the broker what wording is available and what protection it actually provides. Those arrangements are not necessarily equivalent.

Test exclusions and responsibility for claims

A certificate of insurance is evidence of cover, not a complete explanation of it. Review the policy wording, schedule and endorsements with your broker before treating the contractual requirement as satisfied.

Ask specifically whether liability accepted under the franchise agreement exceeds what the policy covers. Insurance may not meet every obligation you agree to assume. A broad promise to reimburse the franchisor is not automatically insured merely because you hold liability cover.

For interruption protection, establish which events trigger payment. Do not assume the policy replaces lost income whenever trading stops. Check the indemnity period, waiting periods, calculation basis and any dependency on insured physical damage.

Clarify claims responsibilities too:

• Who must notify the insurer, and how quickly?
• Must you also notify the franchisor?
• Who controls communications, legal defence and settlement?
• Does the agreement require action that could conflict with policy conditions?

If cover is arranged through a group scheme, ask who holds the policy, whether limits are shared and what happens if the scheme ends. Obtain evidence that your business and activities are included rather than relying on a general assurance about network cover.

Price compliance before committing

Use quotations based on the actual contractual wording, not an indicative premium for a broadly similar business. Budget for premiums, excesses, broker charges where applicable and any security or safety measures required by the insurer.

Check whether the franchisor can increase required limits or introduce additional policies. Ask how much notice you receive and what happens if the specified cover becomes unavailable on reasonable commercial terms. Discuss any necessary contractual qualification with your solicitor before signing.

Confirm when cover must begin: fit-out, recruitment, training or stock delivery may create exposure before opening day. For claims-made policies, ask about retroactive dates and whether continuing or run-off cover could be needed after you stop trading.

Practical takeaway: Before signing, obtain a broker-reviewed insurance schedule, realistic quotations and written clarification of any gap between the franchise contract and the available cover.