Franchisees running multiple units under a single legal entity—even with different DBAs—can save money, simplify compliance, and protect themselves more effectively. This guide explains exactly how to structure your insurance to avoid gaps and unnecessary costs.
🧱 Understanding Your Legal Foundation
What Is a Legal Entity?
Your business may be an LLC, Corporation, or another legal structure. This entity is what the law—and your insurance policy—recognizes as the insured party.
Entity vs. DBA (Doing Business As):
Insurance follows your legal entity, not your store names.
A DBA is simply a nickname and doesn’t have legal status on its own.
🧑🤝🧑 Common Ownership & Shared Risk Exposure
Here’s the key: You can combine multiple locations or DBAs into a single policy as long as they meet two criteria:
Common Ownership:
All operations must be owned by the same legal entity (e.g., Johnson Group, LLC owns all the stores).
Similar Risk Exposure:
The business activities must be of the same type—like multiple smoothie shops or all residential remodeling services. Insurance carriers need consistent exposure types to underwrite one combined policy.
🧃 Real-World Example: Johnson Group, LLC
Scenario: Johnson Group, LLC owns three smoothie bars under different DBAs:
- Smooth Sipz on Main
- Sip Station
- Tropical Smoothie Co.
Even though each has a different name and address, they're all:
- Owned by Johnson Group, LLC
- Offering the same type of product/service (smoothie retail)
✅ Result: All locations are eligible to be insured under one master policy.
🛡️ The Power of One Policy
Ownership-Based Coverage:
Insurance follows the entity that owns the business, not each storefront’s name or brand.
How Insurers Calculate Rates:
- Total revenue
- Number and type of locations
- Nature of operations (i.e., same exposure)
Why It’s Smarter:
A single policy that covers all locations is not only compliant—it’s cleaner, cheaper, and easier to manage.
📋 Your Insurance Policy Essentials
1. Named Insured:
Your official business name (e.g., Johnson Group, LLC) must be listed on your policy.
2. Location Schedule:
Every store, warehouse, or office operated under the entity must appear in the policy’s location schedule.
3. Required Endorsements:
Make sure your policy includes:
- Franchise-required endorsements
- Landlord-mandated language
- Waivers of subrogation or additional insured status
4. Certificates of Insurance (COIs):
COIs must reflect:
- The legal entity
- All applicable locations
- Correct coverage and limits
💰 Save Money & Time
✅ One policy avoids duplicate fees and overlapping coverage
✅ One broker handles all renewals, COIs, and claims
✅ One process simplifies your business and compliance efforts
⚠️ Common Compliance Mistakes to Avoid
❌ Listing only a DBA as the insured (this creates a dangerous coverage gap)
❌ Leaving out new locations from your policy
❌ Ignoring lease-specific insurance requirements
❌ Forgetting to update COIs when you expand or rebrand
🔁 Renewal & Broker Communication
When renewing, be ready to share:
- Updated revenue numbers
- A complete list of locations
- Any operational changes or expansions
Ask Your Broker:
- “Are all of our locations and DBAs listed?”
- “Do we have blanket coverage for future locations?”
- “Are all required endorsements included?”
- “Can you issue COIs quickly when needed?”
✅ Success Checklist
✅ One master policy under your legal entity
✅ All physical locations and DBAs listed
✅ Proper endorsements for franchise and landlord needs
✅ Updated COIs issued for each location
✅ Annual review with your broker
✅ Business structure fully aligned with your policy