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Is boiler & machinery insurance required for a Sonesta Select Sonesta Essential hotel?

Sonesta_Select_Sonesta_Essential Franchise · 2025 FDD

Answer from 2025 FDD Document

nual, which we may revise from time to time, or otherwise in writing.

You must procure and maintain, at your expense, insurance coverage in the types and amounts we periodically require, in addition to any other insurance that may be required by applicable law, your landlord, your mortgagee, or otherwise. At a minimum, such policies include the following (primary and excess/umbrella policies may be used in any combination as long as the total minimum limit requirements are met):

• commercial general liability (CGL) insurance for any claims or losses arising or resulting from the operations/premises of the hotel with limits of not less than $1,000,000 per occurrence and a general aggregate limit not less than $3,000,000; limits shall apply on a per location aggregate basis if the hotel is insured under a blanket policy;

  • liquor liability (applicable only when or if you distribute, sell, serve, or furnish alcoholic beverages) with limits of not less than $1,000,000 per occurrence; limits shall apply on a per location aggregate basis if the hotel is insured under a blanket policy;
  • automobile liability insurance including owned, non-owned, and hired vehicles for combined single limits of bodily injury and property damage of not less than $1,000,000 per occurrence and a general aggregate limit not less than $3,000,000;
  • garage-keeper's liability to the extent that hotel operations include parking operations, with a limit adequate to cover the full actual value of all automobiles that are in your care, custody, and control at any one time;
  • umbrella or excess liability insurance policies as follows: (i) if your Hotel is three stories or less, then you must carry coverage of at least $14,000,000, or (ii) if your Hotel is more than three stories, then you must acquire a policy with coverage of at least $24,000,000. All policies providing excess/umbrella coverage shall follow the form of the primary CGL, worker's compensation, automobile liability, and liquor liability policies;
  • property/all risk and contents insurance (or builder's risk insurance during any period of construction) on all building(s) and contents against loss or damage by fire, lightning and all other risks associated and covered by the "all risks" policy form all in an amount not less than 90% of the replacement cost. Terrorism risk insurance (TRIA) coverage is required;
  • boiler & machinery insurance against loss or damage from explosion of boilers or pressure vessels to the extent applicable;
  • business interruption insurance covering at least 12 months loss of profits and necessary continuing expenses for interruptions caused by a covered occurrence;
  • workers' compensation insurance in statutory amounts for all your employees and employers' liability insurance in amounts not less than $1,000,000 per accident or disease;
  • crime insurance covering employee dishonesty, such as theft of money, securities, or property, with a limit of not less than $1,000,000 per occurrence;
  • employment practices liability insurance covering wrongful acts arising from the employment process; and
  • cyber liabili

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 46–50)

What This Means (2025 FDD)

According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, franchisees are required to procure and maintain several types of insurance coverage. Among these is boiler & machinery insurance, which must cover loss or damage from the explosion of boilers or pressure vessels, to the extent that such equipment is applicable to the hotel's operations. This means that if a Sonesta Select Sonesta Essential hotel has boilers or pressure vessels, the franchisee must obtain this specific insurance coverage.

The insurance policies that Sonesta Select Sonesta Essential requires must be written by an insurance company with an A.M. Best rating of "A" or better. Additionally, the policies must name Sonesta Select Sonesta Essential, its affiliates, and their respective officers, directors, and employees as additional named insureds and loss payees for all liability coverage policies. The franchisee's coverage must be primary, and any insurance carried by Sonesta Select Sonesta Essential will be excess and non-contributory.

Sonesta Select Sonesta Essential may periodically change the amounts of coverage required or mandate different or additional kinds of insurance, including excess liability insurance. Franchisees must provide certificates of insurance within 10 days of signing the Franchise Agreement and renewal certificates no less than 10 days before each policy's renewal date. These certificates must confirm that the policies will not be canceled without at least 30 days' prior written notice to Sonesta Select Sonesta Essential. Franchisees must also supply copies of all insurance policies and proof of payment upon request.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.