What are the minimum insurance requirements for operating a Craters & Freighters franchised business?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
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 maintain specific insurance coverages. These policies must adhere to the amounts and terms outlined in the Operations Manuals. Craters & Freighters requires franchisees to purchase certain insurance policies from their designated insurance supplier.
The minimum insurance requirements include commercial general liability coverage with limits of $2,000,000 for the general aggregate and products-completed operations aggregate, $1,000,000 for each occurrence and personal and advertising injury, and $100,000 for fire legal liability and $1,000,000 for blanket contractual liability. Additionally, franchisees must have 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 that complies with state law, including limits of $1,000,000 for each accident, disease per employee, and disease per policy limit.
Craters & Freighters emphasizes that these are minimum requirements and strongly recommends that franchisees consult with a licensed insurance agent or broker to identify and obtain additional coverage tailored to their specific business needs. This may include coverage for warehouse storage and cyber insurance, which are not explicitly mandated but are advisable given the nature of the business. Franchisees should carefully review these insurance requirements and factor the costs of obtaining and maintaining the necessary coverage into their overall business plan.
Meeting these insurance requirements is crucial for protecting the franchisee's business and assets, as well as ensuring compliance with Craters & Freighters's standards. Failure to maintain adequate insurance coverage could result in a breach of the franchise agreement and potential legal or financial repercussions.