What must the insurance cover for the Equipment for an Even Hotels franchise?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
Hotel assumes any and all risk of loss or damage to the Equipment until such Equipment is returned to and received by HPFS or IHG in accordance with the terms and conditions of this Agreement or the IHG-HPFS agreement.
Hotel agrees to keep the Equipment insured at the expense of Hotel against all risks of loss from any cause whatsoever, including without limitation, loss by fire (including extended coverage), theft and damage, and such insurance shall cover not less than the replacement value of the Equipment.
Hotel shall name HPFS as a loss payee and an additional insured, as applicable, under such insurance policies.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, the franchisee is responsible for insuring the equipment. Specifically, the franchisee must cover any risk of loss or damage to the equipment until it is returned to HPFS or IHG. The insurance policy must cover all risks of loss, including loss by fire (with extended coverage), theft, and damage. The insurance coverage must be no less than the replacement value of the equipment. Additionally, HPFS must be named as a loss payee and an additional insured on the insurance policies.
This requirement ensures that in the event of any damage or loss to the equipment, Even Hotels and HPFS are protected financially. The franchisee bears the responsibility of maintaining adequate insurance coverage, which can be a significant ongoing expense. The stipulation that the coverage must equal the replacement value of the equipment means the franchisee needs to ensure the policy limits are sufficient to cover the cost of replacing the equipment with new items.
Naming HPFS as a loss payee and additional insured provides them with direct recourse in the event of a claim, streamlining the process and ensuring their interests are protected. Franchisees should carefully review their insurance policies to confirm that these requirements are met and that the coverage is adequate to avoid potential financial liabilities.