Franchise Insurance

A typical franchise liability insurance policy may feature the following types of coverages:

• Commercial General Liability (CGL) Insurance: CGL, or general liability insurance, is the foundation of every franchise liability insurance policy. Commonly called ‘slip-and-fall’ insurance, CGL covers you for claims or allegations of third-party bodily injuries and third-party property damage that may occur on your commercial property or as a result of your business’s daily operations.

CGL also includes tenant legal liability coverage for repairing or replacing damaged property that you rent, lease or occupy, protection to deal with allegations of defamation or false advertising, and product liability insurance to cover third-party bodily injury or property damage claims caused by any product you manufacture, distribute, or sell.

• Commercial Property Insurance: Commercial property insurance covers the business space your franchise occupies, whether you own, rent, or lease it. It protects the building and your business contents (electronics, furniture, office equipment) and inventory from damage or loss due to fire, water, extreme weather or a natural disaster, vandalism and theft (like a break and enter). It also includes coverage for any improvements or renovations you make to a rented or leased space, such as lighting, flooring, or painting.

• Equipment Breakdown Insurance: Equipment breakdown insurance pays to repair or replace your franchise’s equipment or machinery up to the policy’s coverage limit if it ceases to operate because of an internal electrical or mechanical failure. It covers various equipment, such as commercial kitchen appliances, HVAC systems, alarm and security systems, computers, point-of-sale (POS) systems, and other electronic office equipment.

• Errors and Omissions (E&O) Insurance: E&O insurance, or professional liability insurance, protects you from allegations or claims of professional negligence, misrepresentation, mistakes, omissions, misconduct, and failure to deliver a service as promised. Any franchisee providing advice or services for a fee or who provides or develops products or devices for customers and partners should carry E&O insurance.

• Cyber Liability Insurance: Cybercrime is a serious and significant threat to every franchisee or small business. Cyber liability insurance is designed to help your business recover quickly if you’re targeted by a cyber-attack or suffer a data breach that exposes or exploits your and your customers’ confidential data. It covers your costs for legal advice, crisis management services, credit monitoring, and repairs or restoration of your software systems damaged by a cyber-related event. It also includes support for the losses your business sustains due to a system outage because of a cyber-attack.

Any franchise or business that has a website, uses email, has a point-of-sale (POS) system, uses computers or cloud systems to store data, or provides computer hardware and software to customers should have cyber liability insurance.