What are the minimum coverage limits for cyber liability insurance per occurrence and aggregate that Chatime requires?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
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- (10) Insurance. 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; G) crime insurance with a mini
Source: Item 7 — Estimated Initial Investment (FDD pages 17–22)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, franchisees are required to maintain cyber liability insurance with specific minimum coverage limits. Chatime mandates a minimum coverage of $250,000 per occurrence and $250,000 in aggregate for cyber liability insurance.
This insurance coverage is intended to protect both the franchisee and Chatime from potential financial losses resulting from cyber incidents, such as data breaches or cyberattacks. The 'per occurrence' limit refers to the maximum amount the insurance will pay for a single incident, while the 'aggregate' limit is the total amount the insurance will pay over the policy term (typically one year), regardless of the number of incidents.
For a prospective Chatime franchisee, this requirement means factoring in the cost of cyber liability insurance when budgeting for ongoing operational expenses. Failing to maintain the required insurance coverage could result in a breach of the Franchise Agreement, potentially leading to penalties or even termination of the franchise. It is important for franchisees to consult with insurance professionals to secure a policy that meets Chatime's requirements and adequately protects their business from cyber risks.