What are the minimum Employer's Liability insurance limits required for a Carls franchise?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
s liability, and loss payee for property to the extent each has an insurable interest. All insurance policies must be written by an insurance company (or companies) satisfactory to us in compliance with the standards, specifications, coverages and limits set forth in the OPM or otherwise provided to you in writing.
These required insurance policies include, at a minimum, the following: (1) Commercial General Liability insurance with policy limits not less than $5,000,000 per occurrence and in the aggregate. Coverage shall apply per location, including coverage for contractual liability, broad form property damage, personal and advertising injury, product liability and completed operations, not to exclude food-borne illness, as well as Damage to Rented Premises coverage with limits not less than $100,000; (2) Automobile Liability coverage, including owned, leased, non-owned and hired vehicles, with a combined single limit not less than $1,000,000 per accident and additional liability coverage as needed for delivery services. This may be included as part of a package policy; (3) Workers' Compensation, statutory as required by law, and Employer's Liability insurance with limits not less than $500,000, and such other insurance as may be required by the state or locality in which the Franchised Restaurant is operated. This coverage shall also be in effect for all of Franchisee's employees who participate in any of the training programs described in the Franchise Agreement; The required limits in (1) – (3) above may be satisfied through a combination of Primary and Umbrella/Excess Liability coverage. If satisfied through an Umbrella/Excess Liability coverage, the Umbrella/Excess Liability must be "following form" of the underlying Commerical General Liability, Automobile Liability and Employer's Liability coverages; (4) Commercial Property insurance that extends c
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 36–40)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, franchisees are required to maintain Employer's Liability insurance with minimum limits of $500,000. This insurance coverage is part of a broader set of required insurance policies that Carls mandates for its franchisees. The purpose of this insurance is to protect both the franchisee and their employees in the event of work-related injuries or illnesses.
In addition to the Employer's Liability insurance, franchisees must also carry Workers' Compensation insurance as required by law in the state or locality where the franchised restaurant operates. Carls also requires that this Employer's Liability coverage be in effect for all of the franchisee's employees who participate in any of the training programs outlined in the Franchise Agreement.
Carls permits franchisees to meet the required insurance limits through a combination of primary and umbrella/excess liability coverage. However, if an umbrella/excess liability policy is used, it must follow the form of the underlying Employer's Liability coverage. This ensures that the umbrella policy provides the same scope of coverage as the primary policy, offering an additional layer of protection without gaps in coverage. Franchisees should consult with their insurance providers to ensure they meet all of Carls's insurance requirements and understand the terms and conditions of their policies.