Does the Commercial General Liability insurance for a Carls Jr. franchise need to include coverage for food-borne illness?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
he 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.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 37–41)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, franchisees must maintain Commercial General Liability insurance with a policy limit of no less than $5,000,000 per occurrence and in the aggregate. This insurance must apply per location and include coverage for contractual liability, broad form property damage, personal and advertising injury, product liability, and completed operations.
A key requirement for Carls Jr. franchisees is that the Commercial General Liability insurance must specifically include coverage for food-borne illness. Additionally, the policy must provide Damage to Rented Premises coverage with limits not less than $100,000. This ensures that the franchisee is protected against potential liabilities arising from the operation of the restaurant, including incidents related to food safety.
Carls Jr. also mandates other insurance policies, including Automobile Liability coverage with a combined single limit not less than $1,000,000 per accident, and Workers' Compensation and Employer's Liability insurance with limits not less than $500,000. These coverages, along with the Commercial General Liability insurance, can be satisfied through a combination of Primary and Umbrella/Excess Liability coverage, provided the Umbrella/Excess Liability coverage follows the form of the underlying policies.