Why do insurance premiums vary widely for Sonesta Simply Suites hotels?

According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, insurance premiums can vary significantly due to several factors. These include the hotel's location, its size, and the number of employees it has. The choice of insurance carrier, the franchisee's creditworthiness, and prevailing market conditions also play a role in determining the premium amount. Furthermore, the type of coverage purchased will impact the overall cost of insurance for the Sonesta Simply Suites hotel.

For a prospective Sonesta Simply Suites franchisee, this means that budgeting for insurance can be challenging due to the numerous variables involved. The FDD notes that estimating insurance costs is difficult because of these factors. However, the document provides some context: for Brand Hotels located in Florida, the high end of the estimate is $60,775 for conversions and $192,963 for new constructions due to higher local costs and expenses in that state.

It's important for franchisees to obtain comprehensive insurance coverage to protect their investment. The FDD specifies that franchisees must procure and maintain insurance of the types and in the minimum amounts specified by Sonesta Simply Suites, whether in the Brand Manual or otherwise in writing. This insurance must be with insurers having minimum ratings specified by Sonesta Simply Suites, name as additional insureds the parties specified, and carry the endorsements and notice requirements also specified by Sonesta Simply Suites.

Given the wide range of potential insurance costs, prospective Sonesta Simply Suites franchisees should conduct thorough research and obtain quotes from multiple insurance providers. Understanding the specific insurance requirements outlined in the Brand Manual and consulting with experienced insurance brokers can help franchisees make informed decisions and secure appropriate coverage at a competitive price.