What kind of insurance policies does Craters & Freighters designate franchisees to purchase from their 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' 2025 Franchise Disclosure Document, franchisees are required to secure several insurance policies from a designated insurance supplier. These policies are designed to cover various aspects of the business operations and protect against potential liabilities. The mandatory insurance coverage includes commercial general liability, umbrella coverage, automobile liability, and workers' compensation.
The commercial general liability coverage must include bodily injury, property damage, personal injury, and broad form contractual liability, with specific limits: a general aggregate of $2,000,000, $1,000,000 for each occurrence, a products-completed operations aggregate of $2,000,000, personal and advertising injury coverage of $1,000,000, fire legal liability coverage of $100,000, and blanket contractual liability coverage of $1,000,000. Additionally, franchisees need umbrella coverage with a minimum limit of $1,000,000 per occurrence, at least as broad as the required underlying coverage. Automobile liability coverage requires a minimum limit of $1,000,000 comprehensive per occurrence on all hired, owned, and non-owned vehicles. Workers compensation coverage must comply with state law and include limits of $1,000,000 for each accident, $1,000,000 for disease per employee, and a $1,000,000 disease policy limit.
Craters & Freighters also recommends that franchisees work with a licensed insurance agent or broker to identify and obtain additional insurance coverage for their franchised business. This includes, but is not limited to, warehouse storage and cyber insurance coverage. These recommendations suggest that while the mandatory insurance policies provide a baseline level of protection, franchisees should consider additional coverage to address specific risks associated with their operations.
Prospective franchisees should carefully review these insurance requirements and associated costs, as they can significantly impact the overall investment and operational expenses. It is also important to understand the terms and conditions of each policy to ensure adequate protection against potential liabilities. Franchisees should consult with insurance professionals to assess their specific needs and ensure they have appropriate coverage in place.