What are the minimum coverage limits for employment practices 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 must maintain employment practices liability insurance with specific minimum coverage limits. This insurance must cover at least $500,000 per occurrence and $500,000 in aggregate.
This coverage is designed to protect both the franchisee and potentially third parties from claims related to employment practices, and it also includes third-party liability and wage and hour coverage of at least $25,000. The policy's deductible cannot exceed $25,000.
Franchisees are responsible for securing and maintaining this insurance coverage with the specified limits throughout the term of their franchise agreement. Failing to maintain adequate insurance coverage could result in a breach of the franchise agreement and potential liabilities for the franchisee.