What are the minimum Employment Practices Liability (EPL) insurance limits required for Brightstar Care franchisees with annual revenue between $5,000,001 and $10,000,000, specifically for claims of sexual harassment, discrimination, and wrongful termination?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
ith a minimum $100,000 for Wage & Hour defense
costs and a claim is made against you or any of your employees or affiliates, you must obtain a letter of credit for the difference between the standard $250,000 minimum and the $100,000 exception. You must purchase a minimum 12-month extended reporting endorsement (aka "tail") upon sale or closure of your business;
- (2) $1,000,000 minimum limits providing defense costs and damages up to policy limits for claims of sexual harassment, discrimination, and wrongful termination (coverage must include a "3rd Party Endorsement" to respond to client allegations of similar wrongful acts) to include at minimum $500,000 for Wage & Hour defense costs if your annual revenue is between $5,000,001 - $10,000,000. If the EPL is not accessible or available at a reasonable cost (as determined by our finance department in writing), a minimum $100,000 for Wage & Hour defense costs may be accep
Source: Item 22 — CONTRACTS (FDD pages 117–118)
What This Means (2025 FDD)
According to Brightstar Care's 2025 Franchise Disclosure Document, franchisees with annual revenue between $5,000,001 and $10,000,000 must maintain Employment Practices Liability (EPL) insurance with specific minimum limits. This insurance must cover defense costs and damages up to the policy limits for claims of sexual harassment, discrimination, and wrongful termination. The coverage must also include a "3rd Party Endorsement" to address client allegations of similar wrongful acts.
Specifically, Brightstar Care requires a minimum limit of $1,000,000 for Wage & Hour defense costs if the franchisee's annual revenue falls within the $5,000,001 to $10,000,000 range. However, if obtaining EPL insurance at a reasonable cost is not possible, as determined in writing by Brightstar Care's finance department, a minimum of $100,000 for Wage & Hour defense costs may be accepted.
If a Brightstar Care franchisee elects to have EPL with the lower $100,000 limit for Wage & Hour defense costs and a claim is made against them or their employees, they must obtain a letter of credit. This letter of credit must cover the difference between the standard $500,000 minimum and the $100,000 exception. Additionally, upon the sale or closure of the business, the franchisee must purchase a minimum 12-month extended reporting endorsement, also known as a "tail."