Under what circumstances does Carvel recommend, and potentially require, franchisees to obtain Employment Practices Liability insurance and Cyber Liability insurance?

In addition, we recommend, and may require, you to obtain and maintain Employment Practices Liability insurance, including third party coverage and Wage & Hour (FLSA) coverage, and Cyber Liability insurance. If we require you to obtain this coverage, we will specify the minimum requirements in the Manuals. However, 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.

17. Section 13.2 (Required Insurance)

Currently, you must obtain and maintain the following coverage:

• 1. Employment Practices Liability insurance, including third-party coverage, with limits not less than $1,000,000 per employee and $1,000,000 per accident;
• 1. Cyber Liability insurance with limits not less than $1,000,000; and

You must obtain and maintain during the Term, at your expense, a comprehensive business insurance program, including property, commercial general liability, automobile liability, business property, umbrella, workers' compensation, cyber liability and employment practices liability, and (if you serve alcohol) dram shop liability insurance.

Source: Item 23 — Receipts (FDD pages 100–353)