What is the minimum required Umbrella Policy coverage for a Big Apple Bagels franchise?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
e, muffins, sandwiches, and/or coffee, as well as any other items or products that Franchisee is authorized to sell subsequent to the date of this Agreement, to the public through retail or wholesale channels of distribution.
g. Insurance.
- i. 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, equ
Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, franchisees are required to maintain an umbrella policy with a minimum coverage of $1,000,000. This umbrella policy serves as an additional layer of liability coverage above the other required insurance policies, protecting the franchisee from potentially significant financial losses due to large claims or lawsuits.
In addition to the umbrella policy, Big Apple Bagels franchisees must also maintain several other insurance policies, including workers' compensation, comprehensive general liability, products liability, employment practices liability, cyber liability, property insurance, and business interruption insurance. The specific coverage amounts for these policies vary, but all are designed to protect the business from a range of potential risks. For example, franchisees must maintain Comprehensive General Liability of no less than $1,000,000 per occurrence with a General Aggregate of no less than $2,000,000.00.
The franchisor, Big Apple Bagels, has the right to periodically increase the required coverage amounts and may also require different or additional types of insurance to reflect changes in circumstances such as inflation, new risks, or changes in the law. Franchisees are also required to name BAB Systems, Inc. as an additional insured on their insurance policies and provide the franchisor with copies of their insurance policies and evidence of premium payments. These stipulations ensure that Big Apple Bagels is protected from potential liabilities arising from the operation of the franchise and that franchisees maintain adequate coverage to protect their businesses.