Does Engel & Volkers recommend cyber risk/data breach insurance for franchisees?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
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One or more of our officers may own nominal interests in certain of our suppliers that are public companies.
You will need to maintain in effect at all times during the term of the Franchise Agreement a policy or policies of insurance, naming us as an additional insured, with public liability limits of no less than the following amounts: professional liability (real estate errors and omissions) – $2,000,000 each occurrence, bodily injury - $2,000,000 each person; $2,000,000 each accident, and property damage - $2,000,000 each accident. We also recommend a cyber risk /data breach insurance. You must also maintain workers' compensation and other liability insurance as required by state law. We may periodically add to, modify, or delete the types and amounts of insurance coverage that y
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 38–40)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, franchisees are required to maintain certain insurance policies. Engel & Volkers mandates that franchisees obtain public liability insurance with specific minimum limits: $2,000,000 per occurrence for professional liability (real estate errors and omissions), $2,000,000 per person for bodily injury, $2,000,000 per accident for bodily injury, and $2,000,000 per accident for property damage. Additionally, franchisees must maintain workers' compensation and other liability insurance as required by state law.
While Engel & Volkers specifies the minimum coverage amounts for several types of insurance, they also recommend that franchisees obtain cyber risk/data breach insurance. This recommendation suggests that Engel & Volkers recognizes the increasing importance of protecting against data breaches and cyber threats in today's business environment. However, this cyber risk/data breach insurance is not explicitly required, unlike the other liability coverages.
Engel & Volkers retains the right to modify the required types and amounts of insurance coverage periodically. Franchisees will be notified in writing of any changes and must promptly purchase insurance that complies with the new standards. This flexibility allows Engel & Volkers to adapt insurance requirements to changing legal and business landscapes, but it also means that franchisees must be prepared to adjust their insurance coverage as directed by the franchisor.