Claims Scenarios for Franchise Brands and Owners

Understanding the potential risks your business may face is crucial for safeguarding your investment. Below are real-world claims scenarios that illustrate the importance of having comprehensive insurance coverage. These examples highlight various situations where insurance could be the difference between a manageable incident and a financial disaster. Our goal is to ensure that you are well-protected against these risks.

General Liability Claims

Slip-and-Fall Accidents

A ‘franchise restaurant brand’ was sued after a customer slipped on a wet floor, resulting in a back injury that left them unable to work. The lawsuit sought $100,000 to cover medical costs, lost wages, and other expenses.

Copyright Infringement

A ‘franchise brand’ faced a $1 million lawsuit from a competitor who alleged that the franchise copied a trademarked cartoon image on its packaging. The competitor also sought an injunction to prevent further use of the image.

Cyber Crimes

Troubled Employee

A problematic employee, upon learning of their impending termination, stole personal account details of clients and published them online. The business faced lawsuits for invasion of privacy, with total settlement and defense costs exceeding $600,000.

Auto/ Hired and Non-Owned Auto Liability Claims

Auto Accident Involving Two Employees

An employee was giving a ride home to another employee who needed to change a soiled uniform. They were involved in an auto accident that resulted in a fatality, leading to a claim of $1,000,000.

Workers Compensation Claims

Retail Employee Suffers Back Injury

A retail employee twisted their back while trying to catch falling boxes from a high shelf, experiencing a “popping sensation” followed by pain and numbness radiating down their hips and legs. The injury resulted in a $425,000 workers' compensation claim.

E&O – Errors and Omission

Property Damage Due to Contractor Work

A ‘franchise service contractor’ installed a new cooling unit on a commercial building’s roof, but failed to properly complete the foundation support. The unit broke through the roof, causing extensive damage to the building and personal property. While the property damage was covered under the contractor’s general liability policy, the contractor incurred an uncovered errors and omissions loss of $25,000.

Franchisor D&O

A bank received an order of investigation from the FDIC and sought coverage under its Directors & Officers policy for attorney fees related to subpoenas. The insurance coverage was questioned because the FDIC order did not name anyone specifically or allege a wrongful act. The bank incurred a $725,000 loss, underscoring the need for banks to evaluate their policies for potential coverage gaps.

These scenarios highlight the diverse risks you may encounter and the importance of having tailored insurance solutions to mitigate them. Let us help you protect your business from these and other unforeseen challenges.