What is Third Line Forcing?
- When a company or franchisor forces one of their contractors or franchisee to use a financial product or service this is known as Third Line Forcing and is illegal.
A company or a franchisor may require that you have adequate insurance protection to a certain standard, however, they can not enforce who that cover is with. As a business owner you are free to choose to deal with any insurer you wish at your own expense.
Third Line Forcing Example
If a franchisor has presented an insurance option for $10,000,000 liability for $995 and gets a quote with us for only $525, then you may select us as your insurer and decline their offer for insurance.
Why is it Illegal?
Third Line Forcing became illegal following people using powerful positions like a franchisor, to make their franchisees use certain financial products such as insurance, for which they were receiving kick backs or discounts on their own service with those service providers.
How can we help?
We are often asked by clients to look over their contracts with their franchisor or client in order to ensure that the cover they obtain is what is being asked of them and if they have any liability which is outside the policy coverage that they are exposing themselves to. We do this for them free of charge through our legal panel who provide you with the piece of mind that you have the cover you require.
For the franchisors out there we also provide this service to ensure that your franchisee agreement requests only cover which is easily accessible by your franchisees whilst ensuring that your interests are protected.
If you’re unsure or have questions, please feel free to contact one of our qualified tradie account executives to help you out today.