What are the coverage limits required for workers compensation insurance for a Chatime franchise?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
or modify this list as we deem appropriate.
We currently require that you maintain the following insurance coverages: A) general liability coverage with minimums of $1 million per occurrence, $2 million general and products/completed operations aggregate, $1 million personal/advertising injury, $50,000 rented premises damage, and $5,000 medical expenses; B) franchisee commercial auto insurance with a $1 million combined single limit; C) workers compensation insurance with coverage limits of $1 million for bodily injury by disease per accident, $1 million policy limit, and $1 million per employee, regardless of state laws and cannot exclude owner-operators; D) property/business interruption coverage business personal property, tenant improvements, equipment, business interruption, and franchisor royalties, for a minimum of 12 months' actual loss sustained; E) cyber liability insurance with minimum coverage limits of $250,000 per occurrence and $250,000 aggregate; F) employment practices liability insurance with minimum coverage limits of $500,000 per occurrence and $500,000 aggregate, which includes third party liability and wage & hour coverage of at least $25,000, with a maximum deductible that does not exceed $25,000; and G) crime insurance with a
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 22–25)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, franchisees are required to maintain workers compensation insurance with specific coverage limits. The required coverage includes $1 million for bodily injury by disease per accident, a $1 million policy limit, and $1 million per employee. This coverage is mandatory regardless of state laws and must not exclude owner-operators.
This requirement ensures that Chatime franchisees are adequately protected against potential liabilities arising from workplace injuries or illnesses. The $1 million coverage limits for various aspects of workers compensation provide a financial safety net for both the franchisee and their employees. By mandating these specific coverage amounts, Chatime aims to mitigate risks associated with employee health and safety, ensuring that franchisees can meet their obligations in case of an accident or illness.
It is important for prospective Chatime franchisees to factor in the cost of this insurance when assessing the overall investment and operational expenses. Insurance premiums can vary based on factors such as the insurance carrier's charges, terms of payment, and the franchisee's history. Additionally, all insurance policies must name Chatime and its affiliates as an additional insured party, further protecting the franchisor from potential liabilities.
Franchisees should consult with insurance professionals to obtain quotes and understand the specific terms and conditions of workers compensation insurance policies that meet Chatime's requirements. Understanding these insurance obligations is a critical part of the due diligence process for anyone considering investing in a Chatime franchise.