What is the minimum Employers' Liability coverage limit required for each accident, including occupational disease coverage, for Chesters?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
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Insurance. You must have the types and amounts of insurance coverage appropriate in your market for the Restaurant's business activities, which must include at least One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) in the annual aggregate of comprehensive General Liability coverage, Workers' Compensation coverage providing benefits, as required by applicable law, and Employers' Liability coverage with a limit of not less than One Million Dollars ($1,000,000) each accident, including occupational disease coverage. The policies must name Chester's International, LLC as an additional insured and provide for a waiver of subrogation in favor of CHESTER'S. Your insurance will be primary and any insurance carried by CHESTER'S will be excess and non-contribut
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–22)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, franchisees must maintain Employers' Liability coverage with a minimum limit of $1,000,000 for each accident, which includes coverage for occupational diseases. This insurance requirement is part of a broader set of insurance obligations Chesters imposes on its franchisees to protect the business and brand.
In practical terms, this means a Chesters franchisee needs to secure an insurance policy that meets or exceeds this coverage level. This coverage is designed to protect the franchisee from potential financial liabilities arising from employee injuries or illnesses sustained during their employment. The policy must also name Chester's International, LLC as an additional insured and provide a waiver of subrogation in favor of CHESTER'S, meaning the insurance company cannot attempt to recover claim payments from Chesters.
The franchisee's insurance coverage is primary, meaning it will be the first line of defense in the event of a claim, while any insurance carried by Chesters will be excess and non-contributory. This arrangement ensures that the franchisee bears the initial responsibility for covering liabilities, while Chesters's insurance acts as a secondary layer of protection. Failing to maintain the required insurance coverage could result in a breach of the franchise agreement and potential penalties.
It is important for prospective Chesters franchisees to factor in the cost of this insurance coverage when evaluating the overall investment required to start and operate the franchise. They should consult with insurance professionals to obtain quotes and ensure they understand the terms and conditions of the required policies.