How does the obligation to purchase insurance from a designated supplier for Craters & Freighters in Item 8 relate to the obligations listed in Item 9?
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.
What This Means (2025 FDD)
According to the 2025 FDD, Item 8 outlines that Craters & Freighters franchisees must purchase specific insurance policies from the franchisor's designated insurance supplier. The required insurance covers the operations of the franchised business, with amounts and terms detailed in the Operations Manuals. This includes commercial general liability coverage with limits such as a $2,000,000 general aggregate and $1,000,000 per occurrence, umbrella coverage with a minimum limit of $1,000,000 per occurrence, automobile liability with a minimum limit of $1,000,000, and workers compensation coverage with limits of $1,000,000 for each accident and disease.
Item 8 states that the insurance policies and amounts listed are the minimum requirements. Craters & Freighters strongly recommends franchisees work with a licensed insurance agent or broker to identify and obtain additional insurance coverage, including warehouse storage and cyber insurance coverage.
The FDD excerpts provided do not contain Item 9, so the relationship between the insurance requirements in Item 8 and the franchisee obligations in Item 9 cannot be determined. A prospective franchisee should review Item 9 of the FDD to understand these obligations and how they relate to the insurance requirements outlined in Item 8. Specifically, the franchisee should ask Craters & Freighters about any fees, payments, or ongoing expenses that are tied to the insurance requirements.