Is a Checkersrallys franchisee required to obtain cyber insurance, and if so, what is the minimum coverage amount?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
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Insurance
During the term of the Franchise Agreement, you must maintain the following categories of insurance coverage in force at your sole expense, all containing at least the following minimum amounts of liability coverage: (a) general liability ($1,000,000 per occurrence and $2,000,000 aggregate); (b) automobile ($1,000,000 combined single limit) for owned and hired, non-owned liability; (c) umbrella liability ($5,000,000 per occurrence and aggregate) with employer's liability, general liability, and automobile liability scheduled as underlying policies; (d) property covering the Franchised Restaurant and personal property in an amount 100% of the full replacement cost of the Franchised Restaurant and personal property, and business income coverage covering 12 months of actual loss sustained; (e) workers' compensation (as required by statute); (f) employer's liability ($1,000,000/$1,000,000/$1,000,000); (g) employment practices liability ($1,000,000 per occurrence and aggregate limit); (h) cyber insurance ($1,000,000 per occurrence and agg
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 39–44)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, franchisees are required to maintain cyber insurance during the term of the Franchise Agreement. The minimum coverage required is $1,000,000 per occurrence and $1,000,000 in aggregate limit.
In addition to cyber insurance, Checkersrallys franchisees must also maintain other categories of insurance coverage, including general liability, automobile liability, umbrella liability, property insurance, workers' compensation, and employment practices liability. The specific minimum amounts of liability coverage for these other categories are detailed in the FDD.
The insurance policies must be issued by carriers approved by Checkersrallys with an A.M. Best Rating of not less than A VII. The policies must also include Checkersrallys and its affiliates as additional insured, provide for 30 days' prior written notice of any material modification, cancellation, or expiration, and include a waiver of subrogation in favor of Checkersrallys and its affiliates. Checkersrallys retains the right to periodically increase the required coverage amounts or require different or additional insurance coverage to reflect changes in circumstances such as inflation or the identification of new risks.