factual

What is the minimum amount of environmental pollution/impairment insurance coverage required for a Circle K franchise?

Circle_K Franchise · 2025 FDD

Answer from 2025 FDD Document

otor fuel or motor fuel products purchased from Seller hereunder. Seller reserves the right to market or sell, and authorize others to market or sell, motor fuel or motor fuel

products in any manner Seller chooses, including through its own retail outlets or through designated wholesalers or other retailers.

  1. Confidential Information. The confidentiality obligations of the Franchise Agreement apply to any nonpublic information received by or made available to Purchaser hereunder.

29. Purchaser's Insurance Requirements.

  • (a) Purchaser 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) if Purchaser operates, or permits the operation of, a service bay and/or car wash on the Premises, Legal Liability Insurance covering fire, theft or collision, with a minimum limit of $500,000 per occurrence and coverage in the general aggregate amount of no less than $1,000,000; (iii) Automobile Liability Insurance, covering all owned, hired or otherwise operated non-owned automobiles, for death of or injury to any one person and liabilities for loss of or damage to property resulting from any one accident with a combined single limit of not less than $1,000,000 per occurrence, including MCS 90 endorsement or other acceptable evidence of financial responsibility as required by the Motor Carrier Act of 1980 and the Pollution Liability Broadened Coverage endorsement; (iv) Workers Compensation Insurance as required by law; (v) 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 (vi) environmental pollution/impairment insurance coverage in an amount of at least $1,000,000 on a continuous and uninterrupted basis insuring Purchaser 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 Purchaser's business at the Premises. Such environmental/pollution impairment coverage shall extend at least two (2) years beyond the expiration, termination, or nonrenewal of this Agreement. Purchaser 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 financial assurance test requirements of the EPA's Financial Responsibility Regulations (40 CFR Part 280).
  • (b) Purchaser understands and agrees that any insurance coverage purchased by Seller shall not contribute to Purchaser's coverage requirements under subparagraph (a) above. All insurance policies covered by subparagraph (a) will name Seller and its affiliates as additional insured and will be primary as to any other existing, valid and collectible insurance. All such insurance shall contain provisions whereby the insurer releases all rights of subrogation against Seller. The foregoing requirements are minimum insurance requirements only and may or may

not adequately meet the entire insurance needs of Purchaser. Seller may require Purchaser to carry additional types and amounts of insurance coverage, including modifications to any existing insurance required under subparagraph (a) above. Each policy or policies shall provide that the liability coverage afforded applies separately to each insured against whom a claim is brought as though a separate policy had been issued to each insured. If Seller so requires, Purchaser shall furnish Seller with certificates of such insurance that provide that coverage wil

Source: Item 23 — RECEIPTS (FDD pages 100–359)

What This Means (2025 FDD)

According to Circle K's 2025 Franchise Disclosure Document, franchisees must maintain environmental pollution/impairment insurance coverage. The minimum required coverage is $1,000,000, which must be maintained continuously. This insurance is intended to cover all environmental liabilities associated with the storage, handling, dispensing, and/or sale of motor fuel products and lubricants at the Circle K premises, as well as the general operation of the franchisee's business at the location.

This environmental/pollution impairment coverage must extend for at least two years beyond the expiration, termination, or nonrenewal of the Franchise Agreement. This extended coverage period ensures that any potential environmental issues that arise after the franchise relationship ends are still covered by the franchisee's insurance policy.

Circle K franchisees have the option to meet the environmental pollution/impairment coverage requirements for underground storage tanks by participating in the federal Environmental Protection Agency (EPA) approved state financial assurance fund or another EPA-approved method to demonstrate financial responsibility. Franchisees can also satisfy the financial assurance test requirements outlined in the EPA's Financial Responsibility Regulations (40 CFR Part 280). This provides franchisees with flexibility in meeting their environmental insurance obligations, allowing them to choose the most suitable and cost-effective method for their specific circumstances.

If a Circle K franchisee fails to obtain the required insurance coverage, Circle K has the option, but not the obligation, to obtain insurance coverage on the franchisee's behalf. In such cases, the franchisee is responsible for reimbursing Circle K for all costs and expenses incurred in obtaining the insurance coverage. This provision ensures that the franchise location remains compliant with insurance requirements, even if the franchisee fails to fulfill their obligation.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.