Can the required insurance limits for a Carls franchise be satisfied through a combination of Primary and Umbrella/Excess Liability coverage?

According to Carls's 2024 Franchise Disclosure Document, the required insurance limits for the franchise can be met through a combination of Primary and Umbrella/Excess Liability coverage. If utilizing Umbrella/Excess Liability coverage, it must follow the form of the underlying Commercial General Liability, Automobile Liability, and Employer's Liability coverages.

Carls requires franchisees to maintain several types of insurance, including Commercial General Liability insurance with policy limits of not less than $5,000,000 per occurrence and in the aggregate, Automobile Liability coverage with a combined single limit of not less than $1,000,000 per accident, and Workers' Compensation and Employer's Liability insurance with limits not less than $500,000.

All insurance policies must be written by an insurance company with an "A- VIII" or better rating by A.M. Best Company and must be satisfactory to CJR. The policies should also be endorsed to provide that the coverages are primary and that any insurance carried by additional insured or loss payee is excess and non-contributory. Additionally, the policies must extend to and provide indemnity for all obligations and liabilities of the franchisee to third parties and all other items for which the franchisee is required to indemnify CJR under the agreement.

Carls also requires that CJR and its affiliates be named as Additional Insured on a primary and non-contributory basis for Commercial General Liability, Automobile Liability, and Umbrella/Excess Liability policies, and as Loss Payee for Commercial Property coverage. Franchisees must provide evidence of satisfactory insurance and proof of payment to CJR no later than 30 days prior to the scheduled opening date of the Franchised Restaurant, the date the franchisee takes possession of the Franchised Location, or the date construction commences at the Franchised Location.