What is the minimum Umbrella Liability coverage a Cream franchisee is required to have?
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 must maintain an Umbrella Liability policy with a minimum coverage of $3,000,000. This coverage is designed to be in excess of the franchisee's Commercial General Liability, Auto Liability, and Employer’s Liability insurance.
In practical terms, this means that if a Cream franchisee faces a liability claim that exceeds the limits of their primary insurance policies (Commercial General Liability, Auto Liability, and Employer’s Liability), the Umbrella Liability policy would provide additional coverage up to $3,000,000. This type of insurance acts as a safety net, protecting the franchisee from potentially devastating financial losses due to large claims or lawsuits.
It is important for prospective Cream franchisees to understand that this is just the minimum required coverage. Franchisees should assess their specific risks and consult with an insurance professional to determine if higher coverage limits are appropriate for their situation. Factors such as location, sales volume, and number of employees can all influence the amount of coverage needed to adequately protect the business.