What is the minimum amount of umbrella liability insurance a Cream franchisee must maintain?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
| Workers’ Compensation | Statutory minimum coverage amounts, with employer liability minimum limit of $1,000,000. |
|---|---|
| Umbrella Liability | Not less than $3,000,000 to be in excess of Commercial General Liability, Auto Liability, and Employer’s Liability. |
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 24–27)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, franchisees are required to maintain umbrella liability insurance. The minimum coverage amount must not be less than $3,000,000. This umbrella policy is designed to provide excess coverage above the franchisee's Commercial General Liability, Auto Liability, and Employer’s Liability insurance policies.
This requirement ensures that Cream franchisees have a substantial layer of financial protection in the event of a major claim or lawsuit. The $3,000,000 umbrella policy acts as a safeguard, kicking in when the limits of the underlying liability policies are exhausted. This can be particularly important in situations involving significant bodily injury, property damage, or employer-related liabilities.
For a prospective Cream franchisee, understanding and securing this level of insurance is a critical pre-opening task. They will need to budget for the premiums associated with this coverage and ensure that their insurance provider is aware of Cream's specific requirements. Failing to maintain the required insurance coverage could result in a breach of the franchise agreement and potential penalties.