What insurance requirements must a Sonesta Select Sonesta Essential franchisee meet?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
Each of the insurance policies must: (i) be written by an insurance company with an A.M. Best rating of "A" or better as rated in the most recent edition of Best's Insurance Reports or comparable publication; (ii) to the extent legally permissible, name us, our affiliates, and our and their respective officers, directors, and employees as additional named insureds and loss payees for all liability coverage policies; (iii) provide that the coverages will be primary and that any insurance carried by us will be excess and noncontributory; and (iv) provide that all coverages afforded to us (and our affiliates) will be coextensive with the coverage provided to you or any named insured on such policy, and any language in such policy that purports to limit the coverage available to us (and our affiliates) will be deemed deleted as to us (and our affiliates). We periodically may change the amounts of coverage required under the insurance policies and require different or additional kinds of insurance, including excess liability insurance. All insurance may be effected under policies of blanket insurance which cover your other properties and affiliates so long as such blanket insurance satisfies our requirements, as they periodically are modified. Our requirements for minimum insurance coverage are not representations or warranties of any kind that such coverage is sufficient for your Hotel's operations. Such requirements represent only the minimum coverage that we deem acceptable to protect our interests. It is your sole responsibility to obtain insurance coverage for your Hotel that you deem appropriate, based on your own independent investigation. We are not responsible if you sustain losses that exceed your insurance coverage under any circumstances. Additionally, no insurance coverage that you or any other party maintains will be deemed a substitute for your indemnification obligations to us or affiliates under Section 15.D or otherwise.
Within 10 days of the Effective Date, and in any event, prior to opening your Hotel as a Brand Hotel, you must provide us certificates of insurance showing compliance with the insurance requirements. The certificate of insurance must include a statement that the policies will not be canceled without at least 30 days' prior written notice to us. Upon our request, you must supply us with copies of all insurance policies and pr
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to the 2025 Franchise Disclosure Document, Sonesta Select Sonesta Essential franchisees must adhere to specific insurance policy requirements. These policies must be written by an insurance company with an A.M. Best rating of "A" or better. The policies should also 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. The franchisee's coverage must be primary, meaning that any insurance carried by Sonesta Select Sonesta Essential will be excess and noncontributory.
The insurance coverage provided to Sonesta Select Sonesta Essential and its affiliates must be coextensive with the coverage provided to the franchisee. Any policy language that attempts to limit the coverage available to Sonesta Select Sonesta Essential will be deemed deleted as it pertains to them. Sonesta Select Sonesta Essential retains the right to modify the required coverage amounts and types of insurance, including potentially requiring excess liability insurance. Franchisees may use blanket insurance policies that cover other properties and affiliates, provided these policies meet Sonesta Select Sonesta Essential's requirements, as they are periodically updated.
Sonesta Select Sonesta Essential clarifies that its minimum insurance coverage requirements are not representations or warranties that such coverage is sufficient for the franchisee's hotel operations. It is the franchisee's responsibility to obtain adequate insurance coverage based on their own independent investigation. Sonesta Select Sonesta Essential is not liable for losses exceeding the franchisee's insurance coverage. Furthermore, the franchisee's insurance coverage does not substitute their indemnification obligations to Sonesta Select Sonesta Essential or its affiliates.
Within 10 days of the franchise agreement's effective date, and before opening the hotel as a branded location, franchisees must provide certificates of insurance demonstrating compliance with these requirements. These certificates must state that the policies will not be canceled without at least 30 days' prior written notice to Sonesta Select Sonesta Essential. Upon request, franchisees must also supply copies of all insurance policies and proof of premium payments to Sonesta Select Sonesta Essential.