What is the minimum limit for the Umbrella Liability Insurance Policy that Azal Coffee requires?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
for those matters.
You must purchase insurance coverage for your business in accordance with our standards and specifications. We currently specify the following insurance coverages:
- Comprehensive general liability insurance with limits of at least $1,000,000 per person per occurrence (and $2,000,000 aggregate for bodily injury) and at least $50,000 for property damage per occurrence.
- Personal injury and advertising injury insurance with limits of at least $1,000,000 per occurrence; Building Improvements and Betterments – Full Replacement Cost.
- Employer Practices Liability insurance with limits of at least $1,000,000; An Umbrella Liability Insurance Policy with a limit of at least $1,000,000.
- All risk" insurance on the premises, equipment and supplies, for loss or damage by fire, windstorm, flood, casualty, theft and other risk usually insured against by the owners or lessors of similar property, for at least 100% of the replacement cost of the property.
- Cyber Security Liability insurance with limits of liability as provided in our Brand Standards Manual.
- Worker's Compensation and/or Employer's Liability Insurance as required by law.
- Business Interruption Insurance with limits acceptable to us and with coverage effective no later than 24 hour
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 22–25)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, franchisees are required to maintain an Umbrella Liability Insurance Policy with a minimum limit of $1,000,000. This is part of the insurance coverage Azal Coffee mandates for its franchisees to protect the business.
This requirement means that a prospective Azal Coffee franchisee must secure an insurance policy that provides at least $1,000,000 in liability coverage beyond the limits of their other insurance policies. This umbrella policy acts as an extra layer of protection in case of significant claims or lawsuits. Failing to maintain this level of coverage could result in a breach of the franchise agreement and potential penalties.
Umbrella insurance policies are common in franchising, especially for businesses that interact directly with the public. The $1,000,000 minimum limit suggests that Azal Coffee recognizes the potential for substantial liability claims and wants to ensure that franchisees are adequately protected, safeguarding both the franchisee's assets and the brand's reputation. Franchisees should factor the cost of this insurance into their initial investment and ongoing operating expenses.