Can Big Apple Bagels increase the required insurance coverage amounts?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor may periodically increase the amounts of coverage required under such insurance policies and require different or additional kinds of insurance at any time, including excess liability insurance, to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards or other relevant changes in circumstances.
During the term of the Franchise, Franchisee shall maintain in force, under policies of insurance issued by carriers duly admitted in the Store's state, with an A.M.
Best rating not less than A-, and acceptable to Franchisor, comprehensive general liability and property damage insurance against claims for bodily and personal injury, death and property damage caused by or occurring in conjunction with the operation of the BAGELS Store, or otherwise in conjunction with the conduct of business by Franchisee pursuant to the Franchise Agreement, under one or more policies of insurance containing coverage for: Workers Compensation including Employers Liability in the limit of no less than $500,000; Comprehensive General Liability of no less than $1,000,000 per occurrence with a General Aggregate of no less than $2,000,000.00; Products Liability of $2,000,000; Employment Practices Liability of no less than $500,000, Cyber Liability of no less than $1,000,000; Property Insurance in the amount of the replacement cost for stock, inventory, equipment and improvements and betterments; Business Interruption in an amount equal to at least twelve (12) months of gross revenue; and coverage for equipment breakdown in the minimum amount of $25,000, and an Umbrella Policy of no less than $1,000,000.
In addition, if Franchisee uses a vehicle to deliver product or supplies, he must maintain Comprehensive Auto Liability coverage of no less than $1,000,000.
Further, if any employee of Franchisee ever uses a vehicle for company business, the Comprehensive General Liability insurance must include "Hired and Non-Owned" automobile liability coverage of no less than $1,000.000.
Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, Big Apple Bagels has the right to periodically increase the required insurance coverage amounts. This means that during the franchise term, a franchisee may be required to obtain higher levels of insurance coverage than initially specified.
Big Apple Bagels can also require different or additional kinds of insurance at any time, including excess liability insurance. These changes can be made to reflect factors such as inflation, the identification of new risks, changes in laws or standards of liability, and higher damage awards. This flexibility allows Big Apple Bagels to adapt to changing circumstances and ensure adequate protection against potential liabilities.
The standard insurance requirements include policies for Workers Compensation (no less than $500,000), Comprehensive General Liability (no less than $1,000,000 per occurrence with a General Aggregate of no less than $2,000,000), Products Liability ($2,000,000), Employment Practices Liability (no less than $500,000), Cyber Liability (no less than $1,000,000), Property Insurance (replacement cost), Business Interruption (12 months of gross revenue), equipment breakdown ($25,000 minimum), and an Umbrella Policy (no less than $1,000,000). If a vehicle is used for delivery, Comprehensive Auto Liability coverage of no less than $1,000,000 is required. If any employee uses a vehicle for company business, the Comprehensive General Liability insurance must include "Hired and Non-Owned" automobile liability coverage of no less than $1,000.000. A franchisee should factor in potential increases to these amounts when assessing the ongoing costs of operating a Big Apple Bagels franchise.