Are Craters & Freighters franchisees required to purchase insurance policies from a designated insurance supplier?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
You must establish and operate your Franchised Business in compliance with your Franchise Agreement and the standards and specifications contained in our Operations Manuals.
We have standards and specifications for your insurance policies, and you must purchase certain insurance policies from our designated insurance supplier. You are required to have insurance covering the operations of your Franchised Business, in such amounts and on such terms, as prescribed by the Operations Manuals. As of the date of this Franchise Disclosure Document, this insurance will be a combination of, and not limited to:
- Commercial general liability coverage which includes bodily injury, property damage, personal injury, and broad form contractual liability, with the following limits:
- o General aggregate: $2,000,000 o Each occurrence: $1,000,000
- o Products-completed operations aggregate: $2,000,000
o Personal and advertising injury: $1,000,000
o Fire legal liability: $100,000
o Blanket contractual liability: $1,000,000
- Umbrella coverage with a minimum limit of $1,000,000 per occurrence, at least as broad as the required underlying coverage.
- Automobile liability with a minimum limit of $1,000,000 comprehensive per occurrence on all hired, owned, and non-owned vehicles.
- Workers compensation coverage which complies with state law and with the following limits:
o Each accident: $1,000,000
o Disease – each employee: $1,000,000 o Disease – policy limit: $1,000,000
The policies and amounts provided above are our minimum insurance requirements. We strongly recommend that you work with a licensed insurance agent or broker to identify and obtain additional insurance coverage for your Franchised Business including, but not limited to, warehouse storage and cyber insurance coverage.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 18–20)
What This Means (2025 FDD)
According to Craters & Freighters's 2025 Franchise Disclosure Document, franchisees are required to purchase certain insurance policies from Craters & Freighters's designated insurance supplier. The specific types and amounts of insurance coverage required are detailed in the Operations Manuals.
The required insurance includes commercial general liability coverage with limits of $2,000,000 for general aggregate and products-completed operations aggregate, and $1,000,000 for each occurrence, personal and advertising injury, blanket contractual liability. Additionally, $100,000 is required for fire legal liability. Franchisees must also maintain umbrella coverage with a minimum limit of $1,000,000 per occurrence, automobile liability with a minimum limit of $1,000,000 comprehensive per occurrence on all hired, owned, and non-owned vehicles, and workers compensation coverage complying with state law, with limits of $1,000,000 for each accident, disease per employee, and disease policy limit.
While Craters & Freighters mandates these minimum insurance requirements, they also strongly recommend that franchisees consult with a licensed insurance agent or broker to identify and obtain additional insurance coverage suitable for their specific business needs. This includes considering coverage for warehouse storage and cyber insurance, which are not explicitly included in the minimum requirements. This recommendation suggests that franchisees should proactively assess their risks and ensure they have adequate protection beyond the basic mandated coverage.
It is important for prospective Craters & Freighters franchisees to carefully review the Operations Manuals to understand the full scope of required insurance policies and to factor these costs into their financial projections. Additionally, franchisees should consider the potential benefits of obtaining additional insurance coverage beyond the minimum requirements to mitigate potential risks and protect their investment.