What is the minimum blanket contractual liability limit required by Craters & Freighters?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
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
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 maintain certain insurance coverages. One of these requirements is blanket contractual liability coverage with a minimum limit of $1,000,000. This coverage is part of a broader commercial general liability insurance that also includes specific limits for general aggregate, each occurrence, products-completed operations aggregate, personal and advertising injury, and fire legal liability.
In practical terms, this means a Craters & Freighters franchisee must secure an insurance policy that covers contractual liabilities up to $1,000,000. This protects the franchisee in case of legal claims arising from contracts they enter into while operating the business. It is important for prospective franchisees to factor in the cost of this insurance coverage when assessing the overall financial investment required to start and run a Craters & Freighters franchise.
The FDD also states that these are the minimum insurance requirements, and Craters & Freighters strongly recommends that franchisees consult with a licensed insurance agent or broker to identify and obtain additional coverage, such as warehouse storage and cyber insurance, based on their specific needs and risk assessment. This suggests that the franchisor recognizes the potential for liabilities beyond the basic coverage and advises franchisees to take a proactive approach to risk management.
It is typical in the franchise industry for franchisors to mandate minimum insurance coverage levels to protect both the franchisee and the brand. The specific types and amounts of coverage can vary depending on the nature of the business and the associated risks. Franchisees should carefully review the insurance requirements outlined in the FDD and consult with insurance professionals to ensure they have adequate protection.