If a Hardees franchisee satisfies the required insurance limits through Umbrella/Excess Liability coverage, what form must the Umbrella/Excess Liability take?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
The required limits set forth in 15.B(1)-(3) may be satisfied through a combination of Primary and Umbrella/Excess Liability coverage. If satisfied through an Umbrella/Excess Liability coverage, the Umbrella/Excess Liability must be "following form" of the underlying Commercial General Liability, Automobile Liability, and Employer's Liability coverages.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, if a franchisee chooses to meet the required insurance limits using a combination of primary and Umbrella/Excess Liability coverage, the Umbrella/Excess Liability coverage must adhere to a specific form. This form is defined as "following form" coverage.
In practical terms, "following form" means that the Umbrella/Excess Liability coverage must mirror the terms and conditions of the underlying Commercial General Liability, Automobile Liability, and Employer's Liability coverages. This ensures that the Umbrella/Excess Liability policy provides consistent and comprehensive protection that aligns with the primary policies.
For a prospective Hardees franchisee, this requirement means they need to ensure that their insurance broker or provider understands the "following form" requirement and structures the Umbrella/Excess Liability policy accordingly. Failure to comply with this requirement could result in the franchisee being underinsured or in violation of the franchise agreement, potentially leading to penalties or termination of the agreement.