Business Franchise Australia


NFIB – Streamlining the Process of Insurance for Franchised Businesses

Franchised businesses have the same requirements for insurance as any other business, with one marked difference. In franchised businesses, both the franchisors and their franchisees need to each have their own insurance in place for the risks they carry.

It also remains the responsibility of the franchisor to ensure their franchisees have at least sufficient compulsory insurance in place, such as public liability cover, and workers’ compensation if the franchisee has employees. There are also many other types of insurance that may be required in a franchise, depending on the business—such as property, goods and stock, business interruption, landlord insurance, and burglary cover.

For example, a shop business will most likely need cover for stock, money, equipment, burglary and property in cases where the business owner also owns the premises. A service business, such as bookkeeping or consulting, will not require insurance for stock and goods, but will require professional indemnity cover.

Insurance can be a complex affair and possibly even more so when it comes to the multiple relationships that exist within a franchised business. However, there is a very good way of streamlining and simplifying the process that can be beneficial to both franchisors and their franchisees.

Endorsing a managed insurance program

One way of simplifying the process is through a managed insurance program specifically designed for franchises. In this type of program, the franchisor and the insurance provider enter into an agreement where the appropriate cover is provided for the franchised business, and any franchisees who come on board only need to join the existing system.

This type of setup means franchisees can be assured of not only having the compulsory insurance they need in place, but also the right kinds of other cover for their businesses. In addition, franchisors can also be confident that their insurance compliance obligations regarding their franchisees are being met, without having to check up with each of their franchisees every year.

Another advantage is that of uniformity of cover throughout the franchised business, rather than having different providers, policies, and cover levels spread throughout the franchise. 

Since a managed program utilises wholesale or group cover, money is usually saved on premiums compared to when individual insurance policies are in place.

The NFIB system

National Franchise Insurance Brokers (NFIB) provides managed insurance cover specifically designed for franchised businesses. Franchisors negotiate the cover they need for their franchised business, and their franchisees simply need to hook into that program through an easy-to-use custom-created online process, to ensure they have the right types and levels of cover for their own businesses.

NFIB has managed to reduce the insurance premiums of many of Australia’s ‘blue chip’ franchises

The benefits of a managed insurance scheme

This system has numerous benefits for both parties.


  • have the assurance that their compliance obligations regarding insurance are met without the need to follow up each franchisee
  • are given access to their own customised online portal
  • have the ability to track their franchisees’ insurance activities
  • are provided with advanced reporting mechanisms, the capacity to tailor their group’s cover according to risk level, and greater control of their insurance in general.


  • avoid the time and stress that tends to go with sourcing the most appropriate types and levels of cover required to financially cover their businesses
  • avoid the need to complete application forms and read complex documents
  • are assured of having the most appropriate forms of cover as it has already been negotiated and secured.

General benefits include:

  • common due dates for all policies, preventing the risk of delayed or missed payments.
  • savings on premiums due to wholesale group cover.
  • 24/7 online claims reporting service and fast claims processing.
  • each franchise is provided with an account executive who not only fully understands the franchising process, but also the individual franchised businesses.
  • NFIB offers risk management review as part of the service.

More information on insurance for franchises is available at the NFIB website or by contacting NFIB directly.


Darryl Morris – Managing Principle