What determines the required coverage amount for Itan's Employer's Liability Insurance and Worker's Compensation Insurance?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
| "All risk" Property Insurance | Replacement Value |
|---|---|
| General Liability Insurance | $1,000,000 per occurrence and $2,000,000 in the aggregate |
| Product Liability and Personal Injury Insurance | $1,000,000 per occurrence and $2,000,000 in the aggregate |
| Automobile Liability Insurance | $1,000,000 per occurrence |
| Business Interruption Insurance | At least 12 months' coverage |
| Employer's Liability Insurance | As required by law |
| Worker's Compensation Insurance | As required by law |
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 18–21)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the required coverage amount for both Employer's Liability Insurance and Worker's Compensation Insurance is determined by law. This means that franchisees must maintain coverage levels that comply with the legal requirements of the jurisdiction in which they operate their Itan salon. These requirements can vary significantly from state to state, and sometimes even by locality.
For a prospective Itan franchisee, this implies that insurance costs for these two categories could fluctuate considerably depending on the location of their franchise. It is essential to research the specific legal requirements for Employer's Liability and Worker's Compensation Insurance in their area to accurately estimate operating expenses. Failing to meet these legal requirements can result in significant penalties and legal liabilities for the franchisee.
Itan requires franchisees to obtain insurance coverage from licensed insurance carriers rated A or better by Alfred M. Best & Company, Inc. This requirement ensures that franchisees work with reputable and financially stable insurance providers. Franchisees should factor in the cost of meeting these insurance requirements when evaluating the overall financial feasibility of opening an Itan franchise.