What happens if a Best Western member fails to maintain required insurance coverage?
Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
f liability insurance, one of the following coverages shall be obtained:
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- An open-ended reporting period for losses occurring during the time of coverage under "claims made" policy, or the first date of contingent approval for Membership, whichever is later.
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- Prior acts coverage back to the Member's first date of "claims made" coverage or the first date of contingent approval for Membership, whichever is later.
- I. The Member's insurance shall be primary in all cases. Any other insurance maintained by Best Western is for the protection of Best Western only and is not supplementary or excess insurance for the Member.
- J. Provides that the insurance companies issuing such insurance shall notify Best Western in writing at least thirty (30) days prior to any cancellation, alteration or nonrenewal of the policy. Each Member and each contingently approved Applicant shall annually provide Best Western with a Certificate of Insurance, on forms provided by Best Western, evidencing a policy or policies meeting the above requirements. The Certificate of Insurance shall be provided with the contingent Applicant certification agreement or prior to or upon expiration of the current Certificate of Insurance on file with Best Western. Failure to provide the Certificate of Insurance shall result in automatic termination in accordance with the provisions of Article II, Section 7 of the Bylaws. As a condition of contingent approval, each Applicant, upon notification by Best Western that Best Western intends to contingently approve the Application, shall provide Best Western with a Certificate of Insurance, on forms provided by Best Western, evidencing a policy or policies meeting the above requirements. This requirement shall be met prior to activation of services, installation or display of any Best Western signs, or advertising or disclosure of any Best Western association. Failure to maintain the insurance coverage required by this rule shall be grounds for termination of Membership in accordance with the provisions of Article II, Section 8 of the Bylaws, immediate suspension of services and termination of contingent approval as may
be prescribed in the Rules and Regulations of Best Western.
Source: Item 23 — Receipts (FDD pages 108–413)
What This Means (2025 FDD)
According to Best Western's 2025 Franchise Disclosure Document, failure to maintain the required insurance coverage can lead to significant repercussions for a member. Best Western requires each member and contingently approved applicant to maintain continuous insurance coverage. This includes providing Best Western with a Certificate of Insurance annually, demonstrating that their policy meets the specified requirements.
Failure to provide this certificate results in automatic termination of the membership, as dictated by Article II, Section 7 of the Bylaws. Furthermore, not maintaining the required insurance coverage is grounds for termination of membership, according to Article II, Section 8 of the Bylaws. This can also lead to immediate suspension of services and termination of any contingent approval status.
Best Western also stipulates that members who do not provide insurance as required agree to indemnify Best Western for any claims and damages that would have been covered had the member maintained the required insurance. This means the member would be financially responsible for covering costs Best Western incurs due to the member's lack of insurance. Prospective franchisees should carefully review the insurance requirements and ensure they can consistently meet these obligations to avoid potential termination and financial liabilities.