Does the Employment Practices Liability insurance for a Bft franchise need to include third-party coverage?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
ased or hired/rented vehicles are used in the operation of the franchise.
- (3) Workers Compensation insurance covering all of Franchisee's employees with statutory coverage and limits as required by state law. Such insurance shall include coverage for Employer's Liability with limits not less than $500,000 each accident, $500,000 disease – each employee, and $500,000 disease – po
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, franchisees are required to maintain Employment Practices Liability insurance. This insurance must have limits of not less than $1,000,000 per claim in the aggregate, with a retention not larger than $25,000.
This policy is intended to provide defense and coverage for claims brought by any of the franchisee's employees or other personnel alleging various employment-related torts. Critically, the policy must also include third-party employment practices liability coverage.
In practical terms, this means that a Bft franchisee's Employment Practices Liability insurance must protect the franchisee not only from claims made by their own employees but also from claims made by third parties, such as customers or vendors, who may allege employment-related torts. This is an important consideration for prospective franchisees as it broadens the scope of coverage required and may impact the cost of the insurance policy. Franchisees must ensure their policy specifically includes this third-party coverage to comply with Bft's requirements.