What specific coverages must the Employment Practices Liability (EPL) insurance include for Brightstar Care franchisees?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
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- (h) Employment Practices Liability (EPL) insurance under the following annual revenue tiers with:
- (1) $500,000 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 $250,000 for Wage & Hour defense costs if your annual revenue is between $0 $5,000,000. 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 accepted. Should you elect EPL with 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 accepted. Should you elect EPL with 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 $500,000 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; and
- (3) $2,000,000 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 $1,000,000 for Wage & Hour defense costs if your annual revenue is above $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 accepted. Should you elect EPL with 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 $1,000,000 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.
- (i) Crime coverage responding to employee theft from you or theft of your clients' property with a minimum $25,000 limit per incident and must not contain a Conviction Clause.
- (j) Any other insurance not listed here but required by applicable law, rule, regulation, ordinance or licensing requirements.
Source: Item 6 — OTHER FEES (FDD pages 17–34)
What This Means (2025 FDD)
According to Brightstar Care's 2025 Franchise Disclosure Document, franchisees are required to maintain Employment Practices Liability (EPL) insurance, with the specific coverage amounts varying based on their annual revenue. For franchisees with annual revenue between $0 and $5,000,000, the EPL insurance must have minimum limits of $500,000, covering defense costs and damages related to claims of sexual harassment, discrimination, and wrongful termination. This coverage must also include a "3rd Party Endorsement" to address client allegations of similar wrongful acts, and a minimum of $250,000 for Wage & Hour defense costs.
For franchisees with annual revenue between $5,000,001 and $10,000,000, the minimum EPL limits increase to $1,000,000, with the same coverage for sexual harassment, discrimination, and wrongful termination, including the "3rd Party Endorsement". The Wage & Hour defense costs coverage also increases to a minimum of $500,000. Franchisees with annual revenue above $10,000,000 must have EPL insurance with minimum limits of $2,000,000, maintaining the same coverage types and endorsement, but with Wage & Hour defense costs coverage of at least $1,000,000.
In all revenue tiers, if EPL insurance is not accessible or available at a reasonable cost, as determined by Brightstar Care's finance department, a minimum of $100,000 for Wage & Hour defense costs may be accepted. However, if a franchisee elects this lower coverage and a claim is made, they must obtain a letter of credit for the difference between the standard minimum Wage & Hour defense costs and the $100,000 exception. Additionally, upon the sale or closure of the business, franchisees must purchase a minimum 12-month extended reporting endorsement, also known as a "tail."