What is the minimum aggregate limit for Commercial General Liability insurance required by Desi District?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
xhibit D).
- B. Insurance. You must obtain insurance as described in the Franchise Agreement and in our Brand Standards Manual, which includes (i) "Special" causes of loss coverage forms, including fire and extended coverage, crime, vandalism, and malicious mischief, on all property of the Business, for full repair and replacement value (subject to a reasonable deductible); (ii) Business interruption insurance covering at least 12 months of income; (iii) Commercial General Liability insurance, including products liability coverage, and broad form commercial liability coverage, written on an "occurrence" policy form in an amount of not less than $1,000,000 single limit per occurrence and $2,000,000 aggregate limit, (iv) Business Automobile Liability insurance including owned, leased, non-owned and hired automobiles coverage in
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 26–29)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, franchisees are required to maintain Commercial General Liability insurance with specific coverage limits. This insurance must include products liability coverage and broad form commercial liability coverage, written on an "occurrence" policy form. The minimum required coverage is $1,000,000 single limit per occurrence and $2,000,000 aggregate limit.
In practical terms, this means a Desi District franchisee must secure a Commercial General Liability insurance policy that can cover up to $1,000,000 for a single incident and up to $2,000,000 for all incidents within the policy period. This coverage protects the franchisee's business from financial losses due to common risks such as customer injuries, property damage, or product-related claims. The policy must be written on an "occurrence" basis, meaning it covers incidents that occur during the policy term, regardless of when the claim is filed.
Furthermore, the insurance policy must list Desi District and its affiliates as additional insured parties and include a waiver of subrogation in their favor. This protects Desi District from potential liabilities arising from the franchisee's operations. The policy must also be primary and non-contributing with any insurance carried by Desi District, meaning the franchisee's policy will be the first to respond to a claim. Finally, the franchisee's insurance provider must provide Desi District with 30 days' prior written notice of any policy cancellation.
Meeting these insurance requirements is a crucial aspect of operating a Desi District franchise, ensuring both the franchisee and franchisor are protected from potential financial risks. Franchisees should factor in the cost of this insurance when evaluating the overall investment and operating expenses of the franchise.