What is the recommended minimum coverage for Employment Practices Liability insurance for a Gold Star franchise?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
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Insurance.
Before opening your Restaurant, you must obtain, and maintain at all times during the term of your franchise agreement, the following insurance coverage:
- Special Perils Insurance including theft on the Restaurant to include but not limited to all furniture, fixtures, equipment, signs (attached and unattached), exterior glass, supplies and other property used in the operation of the Restaurant (including flood and/or earthquake coverage where applicable,) for the full repair and replacement value with no coinsurance clause or applicable agreed amount.
- Boiler machinery insurance, provided any Building on the Premises contains equipment of the nature ordinarily covered by such a policy
- Flood Insurance if any material portion of the Premises is located in an area identified in the Federal Register by the Federal Emergency Management Agency as having special flood hazards
- Plate glass insurance Covering the glass in the Premises.
- Commercial General Liability Insurance covering claims for bodily injury, property damage and personal injury, death, property and fire damage, and other damaging or injurious occurrences, with a minimum per occurrence limit of $1,000,000, $1,000,000 liquor liability per occurrence if applicable and a minimum general aggregate limit of $2,000,000.
- Commercial Umbrella $1,000,000 per occurrence, $1,000,000 aggregate. $5,000,000 per occurrence if liquor liability is applicable.
- Products/Completed Operations Aggregate with a minimum coverage of $2,000,000.
- Business Interruption Insurance for actual losses sustained or 12 months.
- Worker's Compensation Insurance and Employer's Liability (STOP GAP) that complies with the statutory requirements of the state in which the Restaurant is located and Employers' Liability Insurance with a minimum limit equal to or greater than the statutory minimum limit required by state law.
- Automotive $1,000,000 Combined Single Limit (CSL) for hired and non-owned automobiles.
- Any other insurance coverage that may be required by your lease.
- Recommended: Employment Practices Liabil
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 21–25)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, franchisees are recommended to carry Employment Practices Liability insurance with a minimum coverage of $1,000,000 per claim. This type of insurance is designed to protect the franchisee from potential lawsuits or claims arising from employment-related issues such as discrimination, wrongful termination, or harassment. While Gold Star only recommends this coverage, it is crucial to consider the potential risks and liabilities associated with managing employees.
In addition to Employment Practices Liability insurance, Gold Star requires franchisees to maintain several other types of insurance coverage, including Commercial General Liability Insurance with a minimum per occurrence limit of $1,000,000 and a minimum general aggregate limit of $2,000,000, Commercial Umbrella insurance of $1,000,000 per occurrence, and Worker's Compensation Insurance that complies with state statutory requirements. Franchisees must also obtain Special Perils Insurance, Boiler machinery insurance (if applicable), Flood Insurance (if applicable), Plate glass insurance, Products/Completed Operations Aggregate with a minimum coverage of $2,000,000, Business Interruption Insurance, and Automotive coverage of $1,000,000 Combined Single Limit.
Gold Star also mandates that all insurance policies name Gold Star Chili as an additional insured franchisor and include standard waivers of subrogation. Franchisees must provide Gold Star with certificates of insurance demonstrating compliance with these requirements before commencing construction or opening their restaurant. Gold Star retains the right to increase the minimum coverage, decrease the maximum deductible, or require different or additional kinds of insurance with at least 30 days' written notice to the franchisee. Failing to maintain the required insurance coverage allows Gold Star to procure it on the franchisee's behalf and charge the franchisee for the cost plus interest.