What is the minimum liability coverage amount required for the Chatime franchisee's insurance policy?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
ments, and Franchisee must comply with the updated coverage standard. Some property owners may require higher levels of commercial general liability insurance or other insurance coverage under their leases.
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 minimum coverage of $100,000 for each claim.
(h) We also currently r
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, franchisees are required to maintain several insurance coverages with specific minimum amounts. The general liability coverage must have 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. Franchisees must also maintain commercial auto insurance with a $1 million combined single limit.
In addition to general and auto liability, Chatime franchisees need to carry 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. Cyber liability insurance is required with minimum coverage limits of $250,000 per occurrence and $250,000 aggregate. Employment practices liability insurance must have minimum coverage limits of $500,000 per occurrence and $500,000 aggregate, including third-party liability and wage & hour coverage of at least $25,000, with a maximum deductible that does not exceed $25,000. Lastly, crime insurance with a minimum coverage of $100,000 for each claim is mandated.
Chatime also recommends that franchisees obtain build-out insurance coverage, including hard costs and soft costs, and business interruption coverage. The hard costs coverage should be $125,000 or higher, or the full replacement value, whichever is greater. It is important to note that these insurance requirements may change, and Chatime will notify franchisees of any updates, which the franchisee must then comply with. Furthermore, some property owners may require higher levels of commercial general liability insurance or other insurance coverage under their leases, adding another layer of potential cost and compliance for the franchisee.