What is the minimum amount of environmental pollution/impairment insurance coverage a Circle K licensee must maintain?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
, credit identifications, fleet cards, debit cards, pre-paid cards or other similar transaction authorization cards, Licensee shall accept and honor all such cards pursuant to the terms and conditions contained in this paragraph 7(f). The term "Transaction Cards" shall be understood to include all such CIRCLE K cards.
- (g) Financial Reports –Within 90 days after the end of its fiscal year, Licensee must provide TMC with Licensee's year-end balance sheets, statements of income and cash flow. At TMC's request, Licensee must audit its year-end balance sheet, statement of income and cash flow.
- (h) Insurance Licensee shall, at its sole expense, obtain insurance from a reputable insurance carrier authorized to do business in the state in which the Premises is located providing full and continuous coverage for the full Term and all renewal periods thereof equivalent to the: (i) Comprehensive General Liability Insurance covering the Premises, all operations at the Premises, products completed operations liability, products liability, contractual liability, fire, explosion and collapse liability, as well as coverage on all contractor's equipment (other than motor vehicles licensed for highway use) owned, hired, or used in connection with this Agreement, bodily injury, and property damage, with minimum limits of at least $1,000,000 per occurrence, and an aggregate coverage of no less than $2,000,000; (ii) Workers Compensation Insurance as required by law; (iii) Employer's Liability Insurance against common law liability, in the absence of statutory liability, for employee bodily injury arising out of the master-servant relationship with a coverage limit of the greater of such amount required by law or $500,000 per occurrence; and (iv) environmental pollution/impairment insurance coverage in an amount of at least $1,000,000 on a continuous and uninterrupted basis insuring Licensee for all environmental liabilities arising out of, but not limited to, the storage, handling, dispensing, and/or sale of motor fuel products and lubricants at the Premises, and/or the ownership and operation of Licensee's
Source: Item 23 — RECEIPTS (FDD pages 100–359)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, a licensee must maintain environmental pollution/impairment insurance coverage. This insurance must be in an amount of at least $1,000,000 on a continuous and uninterrupted basis. This coverage insures the licensee for all environmental liabilities arising from the storage, handling, dispensing, and/or sale of motor fuel products and lubricants at the premises, as well as the ownership and operation of the licensee's business at the premises.
This environmental/pollution impairment coverage must extend at least two years beyond the expiration, termination, or nonrenewal of the License Agreement. The licensee can meet the requirements for environmental pollution/impairment coverage for underground storage tanks by participating in a federal Environmental Protection Agency (EPA) approved state financial assurance fund or another EPA-approved method to demonstrate financial responsibility. Alternatively, they can satisfy any of the other financial assurance test requirements of the EPA's Financial Responsibility Regulations (40 CFR Part 280).
Circle K's requirement for environmental pollution insurance is typical for gas station and convenience store franchises. The purpose of this coverage is to protect both the franchisee and Circle K from potentially significant financial losses due to environmental contamination. Franchisees should factor the cost of this insurance into their overall business expenses and ensure they understand the specific coverage requirements and options available to them.