What is the minimum coverage limit for Employer's Liability Insurance that a Circle K purchaser must obtain?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
ary credit cards, 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 purchaser must obtain Employer's Liability Insurance against common law liability for employee bodily injury arising out of the master-servant relationship. The minimum coverage limit for this insurance is the greater of the amount required by law or $500,000 per occurrence.
This requirement ensures that Circle K franchisees have adequate financial protection in the event an employee sustains a bodily injury that is not covered by workers' compensation laws. The "greater of" clause means that if state or local laws mandate a higher coverage limit than $500,000, the franchisee must comply with the higher amount. This protects both the franchisee and Circle K from potential liabilities arising from employee injuries.
Prospective Circle K franchisees should investigate the specific Employer's Liability Insurance requirements in the state where their franchise will be located to determine if the legal minimum exceeds the $500,000 threshold. They should also consult with an insurance professional to assess their individual risk and determine if higher coverage limits are advisable, as the FDD states that these are minimum requirements only and may not adequately meet the entire insurance needs of the purchaser.