What is the minimum amount of environmental pollution/impairment insurance coverage required for a Circle K Branded Business?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
franchises) based on your purchase of particular products or services or use of particular suppliers.
The Branding Agreement requires you to maintain certain types and minimum amounts of insurance coverage for your Branded Business. You must maintain: (i) Comprehensive General Liability Insurance covering the Branded Business 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 the Branded Business, 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 you 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 Store premises, and/or the ownership and operation of the Branded Business at the premises. Such environmental/pollution impairment coverage shall extend at least two (2) years beyond the expiration, termination, or nonrenewal of the Branding Agreement. You may meet the requirements for environmental pollution/impairment coverage for underground storage tanks by participating in the federal Environmental Protection Agency ("EPA") approved state financial assurance fund or other EPA approved method to demonstrate financial responsibility or by satisfying any of the other fina
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 45–52)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, franchisees are required to maintain environmental pollution/impairment insurance coverage. For a Circle K Branded Business, the minimum coverage amount is $1,000,000. This insurance must be maintained on a continuous and uninterrupted basis. It is designed to protect the franchisee from all environmental liabilities associated with the storage, handling, dispensing, and/or sale of motor fuel products and lubricants at the store premises, as well as the ownership and operation of the business.
This coverage must extend for at least two years beyond the expiration, termination, or nonrenewal of the Branding Agreement. This extended coverage period ensures that any potential environmental issues that arise after the agreement ends are still covered by the insurance policy.
Circle K franchisees have the option to meet the environmental pollution/impairment coverage requirements for underground storage tanks (USTs) by participating in the federal Environmental Protection Agency (EPA) approved state financial assurance fund. Alternatively, they can use another EPA-approved method to demonstrate financial responsibility or satisfy any of the other financial assurance test requirements outlined in the EPA's Financial Responsibility Regulations (40 CFR Part 280). This provides franchisees with flexibility in meeting their insurance obligations while adhering to environmental regulations.