What is the minimum Cyber Liability coverage a Cream franchisee must obtain?
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. |
| Trade Name Restoration/Food Borne Illness | $1,000,000 to cover lost profits due to any alleged or actual contamination, supplier contamination, inoculations, and testing. Coverage must also include crisis management expense coverage. |
| Employment Practices Liability | $1,000,000 limit for coverage of any wrongful employment action and third-party coverage for harassment and discrimination of non-employees. Coverage must name us as co- defendant. |
| Cyber Liability | $1,000,000 to insure any first- or third-party claims including data breach, identity theft, phishing attacks, ransomware, bricking, crisis management expense, defense expenses, and notifications costs. |
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 a minimum of $1,000,000 in Cyber Liability coverage. This coverage is intended to protect against first- or third-party claims related to data breaches, identity theft, phishing attacks, ransomware, bricking, crisis management expenses, defense expenses, and notification costs.
This requirement means that a prospective Cream franchisee must factor in the cost of this insurance policy when calculating their initial and ongoing operational expenses. Cyber Liability insurance is becoming increasingly important for businesses, especially those that handle sensitive customer data or rely heavily on digital systems. The policy helps to mitigate the financial impact of cyber incidents, which can be substantial, including legal fees, remediation costs, and reputational damage.
Cream's specification of a minimum coverage amount indicates the brand's awareness of these risks and its proactive approach to protecting both the franchisee's and the brand's interests. Franchisees should carefully review the terms and conditions of their Cyber Liability insurance policy to ensure that it adequately covers the specific risks associated with their Cream shop. It is also important to stay informed about emerging cyber threats and to implement appropriate security measures to prevent incidents from occurring in the first place.