Putting together a solid Insurance Program for your Franchise Restaurant Group is part science and part art.  You want to make sure you’re protected but also don’t want the costs to be overburdensome for the Franchisees.

Here are some important things to consider when implementing or updating your program:

How Much Insurance do you Require?

For General Liability Insurance, the “standard” of $1,000,00 Per Occurrence and $2,000,000 Aggregate is no longer cutting it. With the rise in medical costs, injury claim awards have been growing quickly. You want to be sure that you’re carefully selecting a limit that provides adequate coverage.

For most Franchisees, a $5,000,000 umbrella is affordable and easily attainable. Be sure that the umbrella is over the General Liability policy and also the Liquor Liability, Auto Liability, and Employers Liability

Also, for multi-unit restaurant franchisees, be sure that their General Liability Aggregate limit applies separately to each location and not just to the overall policy.

Cyber Liability?

Data Breaches continue to be a problem and, as your brand grows, your franchisees become a bigger target for Hackers. If you have a shared gift card program, that can also be an attractive target. Even Restaurants are now storing more data about their customers with advanced POS systems that track Customer and Employee data. 

Be sure that you require a robust policy that provides coverage for Third Party Liability and also First Party Expenses. It’s also best to have coverage for Ransomware and other Extortion Threats.  

Employee Class Action Lawsuits?

Employment Practices Liability Insurance (EPLI) policies are designed to provide protection against a variety of claims from employees (and former employees).  These polices respond to accusations of  Discrimination, Harassment, Wrongful Termination, Retaliation and other employment related claims.  They can also provide 3^rd party coverage in case similar accusations come from a non-employee.
In a Franchise system, claims like this can spread across all of the locations if a story hits the news and more employees hear about it.  A good EPLI policy will also provide HR legal advice to help your Franchisees handle these situations appropriately.

Franchise Reputational Risk?
A food contamination incident at one location can dramatically impact sales at every location across the Franchise Group. A well designed Franchise Reputation Risk policy acts like a Business Interruption policy for bad news. It can replace a Franchisee’s lost income when an unfortunate incident occurs at a location they don’t own. These policies also provide for Crisis Management/PR expenses to help your franchisees deal with local media inquiries and put together a message for your customers that will reduce the financial impact. 

Keeping Track of it All

It’s also critical that, once your program is implemented, you have a system to track compliance and be sure that each Franchisee is living up to their agreement. Statement Insurance Agency has systems in place to help you review Insurance certificates and policy language to be sur that your requirements are being met in a way that is automated and simple for you while still providing the peace of mind you’re looking for. 

If you need help with your Franchise Restaurant Group Insurance Program, reach out and we’ll be happy to help you put together a plan that’s a win/win for you and your franchisee partners. Contact Us Today!