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

According to Red Wagon Club's 2024 Franchise Disclosure Document, franchisees are required to maintain Employment Practices Liability insurance with a minimum coverage of $1,000,000 for employment practices wrongful acts. This coverage extends to third-party protection against harassment and discrimination of non-employees. Additionally, the policy must include a Wage & Hour defense limit of $100,000.

It is important to note that Red Wagon Club requires the policy to name them as a co-defendant and, if available, as an additional insured. This requirement ensures that Red Wagon Club is protected in the event of any employment-related claims against the franchisee. Franchisees must provide Red Wagon Club with a compliant certificate of insurance no less than 45 days after signing the franchise agreement, but before beginning operations, and 20 days prior to any renewal of insurance or whenever Red Wagon Club requests.

Red Wagon Club emphasizes that these insurance requirements represent only the minimum coverage they deem acceptable to protect their interests. It is the franchisee's sole responsibility to determine and acquire any additional coverages necessary to protect their own interests and those of their Red Wagon Club business. Red Wagon Club is not responsible for losses that exceed the franchisee's insurance coverage under any circumstances.

Franchisees should carefully review these insurance requirements and consult with an insurance professional to ensure they have adequate coverage to protect their business from potential employment-related liabilities. Failing to maintain the required insurance coverage could result in Red Wagon Club obtaining insurance on the franchisee's behalf, with the franchisee responsible for reimbursing all premiums, costs, and expenses incurred, plus a reasonable fee for Red Wagon Club's time and resources.