What are the minimum coverage limits for employment practices liability insurance required for a Bang Cookies franchise, including coverage for third-party actions and wage and hour disputes?

According to Bang Cookies' 2024 Franchise Disclosure Document, franchisees must maintain employment practices liability insurance with specific minimum coverage limits. This insurance must cover potential liabilities arising from employment-related claims. The minimum coverage required is $2,000,000, which includes coverage for actions of a third party. Additionally, the policy must include a minimum limit of $100,000 for wage and hour disputes.

This requirement means that a Bang Cookies franchisee needs to secure an insurance policy that specifically addresses potential employment-related lawsuits or claims. The $2,000,000 limit provides a financial safety net in case of significant legal settlements or judgments. The inclusion of third-party actions broadens the coverage to include claims made by individuals who are not directly employed by the franchisee but may have a valid claim related to the franchisee's employment practices.

The specific mention of a $100,000 minimum limit for wage and hour disputes highlights the importance of complying with labor laws. Wage and hour disputes can arise from issues such as unpaid overtime, misclassification of employees, or improper deductions from wages. This specific coverage ensures that the franchisee has financial protection to address these types of claims, which are increasingly common and can be costly to resolve.

Bang Cookies also requires franchisees to obtain other types of insurance coverage, and all insurance policies must be written by a responsible carrier, reasonably acceptable to Bang Cookies. Furthermore, Bang Cookies, its officers, directors, shareholders, partners, agents, representatives, and independent contractors must be named as additional insureds (excluding workers' compensation). The insurance policies must include a provision that the insurance carrier must provide Bang Cookies with no less than 30 days' prior written notice in the event of a material alteration to, or cancellation of, any insurance policy. A certificate of insurance must be furnished by the franchisee to Bang Cookies at the earlier of 90 days after the Effective Date of the Franchise Agreement or prior to the commencement of the initial training program.