Does Chocolate Fish Coffee require Business Automobile Liability insurance?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
cific Obligations
The following are our current specific obligations for purchases and leases:
- A. Real Estate. Your business location is subject to our approval and must meet our specifications. You must use reasonable efforts to have your landlord sign our form of Rider to Lease Agreement (attached to this disclosure document as Exhibit D).
- B. Insurance. You must obtain insurance as described in the Franchise Agreement and in our Brand Standards 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) Business Automobile Liability insurance including owned, leased, non-owned and hired automobiles coverage in an amount of not less than $1,000,000, and (v) Workers Compensation coverage as required by state law.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 16–18)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, franchisees are required to obtain Business Automobile Liability insurance. The required coverage must include owned, leased, non-owned, and hired automobiles. The minimum coverage amount must be no less than $1,000,000.
In addition to Business Automobile Liability insurance, Chocolate Fish Coffee franchisees must also maintain other types of insurance. These include (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, and (v) Workers Compensation coverage as required by state law.
The insurance policies, with the exception of Workers Compensation, must list Chocolate Fish Coffee and its affiliates as additional insureds. These policies must also include a waiver of subrogation in favor of Chocolate Fish Coffee and its affiliates. Furthermore, the franchisee's insurance must be primary and non-contributing with any insurance carried by Chocolate Fish Coffee or its affiliates. Finally, Chocolate Fish Coffee must receive 30 days' prior written notice of cancellation for any of these policies.
Franchisees should consult with qualified insurance professionals to ensure they obtain the appropriate coverage to meet Chocolate Fish Coffee's requirements and to protect their business from potential liabilities. Failing to maintain the required insurance coverage could result in a breach of the franchise agreement.