What are the minimum coverage limits required for Employment Practices Liability insurance, including third-party coverage, that Carvel franchisees must maintain?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
Currently, you must obtain and maintain the following coverage:
- G. Employment Practices Liability insurance, including third-party coverage, with limits not less than $1,000,000 per employee and $1,000,000 per accident;
If you obtain a claims made policy, you must provide a tail coverage policy for no less than one year after the expiration or termination of this Agreement or the closure of the Franchised Business, whichever occurs first. The tail coverage limits must be equal to, or greater than, the limits provided in the prior policy.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, franchisees must maintain Employment Practices Liability insurance, including third-party coverage. The minimum coverage required is $1,000,000 per employee and $1,000,000 per accident.
This insurance protects the Carvel franchisee against claims made by employees or third parties related to employment practices such as discrimination, harassment, or wrongful termination. The coverage limits specify the maximum amount the insurance policy will pay out for each employee involved in a claim and for each accident or incident.
It is important for prospective Carvel franchisees to understand these insurance requirements and factor the cost of these policies into their overall business expenses. Franchisees should also consult with an insurance professional to ensure they have adequate coverage to protect their business from potential liabilities. Additionally, if a franchisee obtains a claims-made policy, they must provide tail coverage for at least one year after the franchise agreement expires or terminates, or after the closure of the franchised business, with coverage limits equal to or greater than the prior policy.