What is the minimum aggregate limit for Commercial General Liability insurance required by Chocolate Bash?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
- B. Insurance. You must obtain insurance as described in the Franchise Agreement and in our Manual, which includes (i) "Special" causes of loss coverage forms, including fire and extended coverage, crime, vandalism, and malicious mischief, on all property of the Business, for full repair and replacement value (subject to a reasonable deductible); (ii) Business interruption insurance covering at least 12 months of income; (iii) Commercial General Liability insurance, including products liability coverage, and broad form commercial liability coverage, written on an "occurrence" policy form in an amount of not less than $1,000,000 single limit per occurrence and $2,000,000 aggregate limit, (iv) Workers Compensation coverage as required by state law. Your policies (other than Workers Compensation) must list us and our affiliates as an additional insured, must include a waiver of subrogation in favor of us and our affiliates, must be primary and noncontributing with any insurance carried by us or our affiliates, and must stipulate that we receive 30 days' prior written notice
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 15–17)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, franchisees must maintain Commercial General Liability insurance with specific coverage limits. This insurance must include product liability coverage and broad form commercial liability coverage, written on an "occurrence" policy form. The minimum required coverage is $1,000,000 single limit per occurrence and $2,000,000 aggregate limit.
This requirement means that a Chocolate Bash franchisee needs to secure an insurance policy that can cover up to $1,000,000 for a single incident and up to $2,000,000 for all incidents within the policy period. The policy must be written on an "occurrence" basis, which means it covers incidents that occur during the policy period, regardless of when the claim is filed.
Furthermore, Chocolate Bash requires that the insurance policy lists Chocolate Bash and its affiliates as additional insured parties. This protects Chocolate Bash from liability for incidents occurring at the franchisee's location. The policy must also include a waiver of subrogation in favor of Chocolate Bash and its affiliates, preventing the insurance company from pursuing claims against Chocolate Bash for payments made to the franchisee. The franchisee's insurance must be primary and noncontributing with any insurance carried by Chocolate Bash, meaning the franchisee's policy pays out first. Finally, the insurance provider must give Chocolate Bash 30 days' prior written notice of any policy cancellation.
Meeting these insurance requirements is a crucial aspect of operating a Chocolate Bash franchise, ensuring both the franchisee and franchisor are protected from potential liabilities. Franchisees should factor in the cost of this insurance when evaluating the overall investment and operating expenses of the franchise.