Does Crab N Spice require Workers Compensation coverage?
Crab_N_Spice Franchise · 2024 FDDAnswer from 2024 FDD Document
ure document as Exhibit D).
- B. Insurance. You must obtain insurance as described in the Franchise Agreement and in our 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. Your policies (other than Workers Compensation) must list us and our affiliates as an additional insured, must include a waiver of subrogation in favor of us and our affiliates, must be primary and non-contributing with any insurance carried by us or our affiliates, and must stipulate that we receive 30 days' prior wri
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 17–19)
What This Means (2024 FDD)
According to Crab N Spice's 2024 Franchise Disclosure Document, franchisees are required to obtain Workers Compensation coverage as mandated by state law. This requirement is part of the broader insurance obligations outlined in the Franchise Agreement and the Manual. Franchisees must adhere to these insurance requirements to operate their Crab N Spice business.
The specific language in the FDD states that franchisees must maintain "Workers Compensation coverage as required by state law." This means the franchisee's obligation to carry this insurance depends on the laws of the state in which they operate their franchise. The level of coverage required will vary based on these state-specific regulations.
In addition to Workers Compensation, Crab N Spice franchisees must also secure other types of insurance, including "Special" causes of loss coverage, business interruption insurance, commercial general liability insurance ($1,000,000 single limit per occurrence and $2,000,000 aggregate limit), and business automobile liability insurance ($1,000,000). The FDD specifies that all policies (except Workers Compensation) must list Crab N Spice and its affiliates as additional insured, include a waiver of subrogation, be primary and non-contributing with any insurance carried by Crab N Spice, and provide the franchisor with 30 days' prior written notice of cancellation. Franchisees should consult with an insurance professional to ensure they meet all of Crab N Spice's requirements and comply with state law.