What is the minimum required Employer Liability coverage for a Red Wagon Club franchise?

According to Red Wagon Club's 2024 Franchise Disclosure Document, franchisees are required to maintain Employer Liability insurance with a minimum coverage of $1 million per occurrence/employee, with the cost of defense outside the policy limits. This insurance protects the Red Wagon Club franchisee against claims made by employees for work-related injuries or illnesses that are not covered by workers' compensation insurance.

The franchisor, Red Wagon Club, mandates this level of coverage to protect its own interests, as well as those of the franchisee. However, the document explicitly states that these minimum insurance requirements are not representations or warranties that the coverage is sufficient for the operation of the franchisee's Red Wagon Club business. It is the franchisee's sole responsibility to determine and acquire any additional coverage they believe is necessary to protect their interests.

Prospective Red Wagon Club franchisees should carefully evaluate their specific business needs and consult with an insurance professional to determine the appropriate level of Employer Liability coverage. Factors to consider may include the number of employees, the nature of the work performed, and the potential risks associated with the business. While the franchisor sets a minimum standard, franchisees should not view this as a ceiling and should ensure they have adequate protection for their particular circumstances.