Does Craters & Freighters require cyber insurance coverage for franchisees?

According to Craters & Freighters' 2025 Franchise Disclosure Document, franchisees are not explicitly required to obtain cyber insurance coverage. While specific minimum insurance requirements are outlined, including commercial general liability, umbrella coverage, automobile liability, and workers compensation, cyber insurance is not listed among these mandatory policies. The mandatory insurance coverage includes general aggregate of $2,000,000, each occurrence of $1,000,000, products-completed operations aggregate of $2,000,000, personal and advertising injury of $1,000,000, fire legal liability of $100,000, and blanket contractual liability of $1,000,000.

However, Craters & Freighters "strongly recommend[s]" that franchisees work with a licensed insurance agent or broker to explore additional insurance coverage options. These recommended coverages include, but are not limited to, warehouse storage and cyber insurance. This suggests that while not mandatory, Craters & Freighters recognizes the potential value and importance of cyber insurance for protecting a franchise business.

For a prospective franchisee, this means that while you won't be obligated to purchase cyber insurance to meet the minimum requirements, it would be prudent to carefully consider the risks associated with data breaches and cyberattacks. Discussing these risks with an insurance professional, as Craters & Freighters suggests, can help you determine whether cyber insurance is a worthwhile investment for your specific business circumstances. Failing to obtain cyber insurance may leave the franchisee vulnerable to significant financial losses in the event of a cyberattack.