General Liability Insurance
Responds to guest injuries and names the franchisor as required.
How it worksLodging
Insurance for Franchise Hotels
Meet your brand’s requirements, protect your franchise agreement and keep certificates current.
One application, shopped to our A-rated carrier network. Number of offers depends on carrier appetite for your class, state, and loss history.
What insurance does a franchise hotel need?
A franchise hotel typically needs the policies its franchise agreement specifies — property and business income, general liability, liquor where alcohol is served, workers’ compensation, commercial auto, cyber, EPLI and umbrella — with the franchisor named as additional insured, waiver of subrogation and timely certificates. Non-compliance can put the franchise agreement in default.
- Typical coverages
- Property and business income; General liability; Liquor liability where applicable; Workers’ compensation; Commercial auto; Cyber; EPLI; Umbrella
- Who requires it
- Franchisor under the franchise agreement; Lenders; Management companies; State law (workers’ compensation)
- What drives cost
- Brand-required limits; Service level; Renovation activity; Number of properties; Loss history
- Typical limit structure
- Limits are set by each franchise agreement and change over time; confirm current requirements in your agreement rather than relying on general figures.
- Where we place it
- Provident Financial Group is an independent insurance agency. Lodging risks are quoted through our agency across our carrier network. We are licensed in New Jersey, New York, Connecticut, Vermont, Massachusetts, Delaware, Maryland, Pennsylvania, Virginia, North Carolina, South Carolina, Georgia, Florida, Ohio, Michigan, Kansas, Kentucky, Texas, California, Arizona, Nevada, Washington, D.C. and Indiana.
What underwriters look at
Owning a franchised hotel means operating under two sets of rules: the law and the franchise agreement. The agreement usually spells out which policies you must carry, the minimum limits, who must be named as additional insured, what wording the endorsements need and how quickly certificates must be delivered. Those requirements change from time to time, and brands notify franchisees when they do.
Some brands offer insurance programs to their franchisees, while others leave placement to the owner. Either way, the franchisee is responsible for compliance. Placing your own coverage through an independent agency lets you compare options while still meeting the brand’s standards, provided every requirement is checked against the current agreement.
Ownership events — a property improvement plan, a renovation, a change of ownership or a refinancing — are when compliance gaps most often appear. New lenders, contractors and management companies add their own certificate and additional insured demands, and a missed endorsement can put the franchise in default.
Non-compliant certificates
Missing endorsements or late certificates can trigger a franchise default notice.
Renovation and PIP exposure
Construction during a property improvement plan changes the risk and requires contractor certificates.
Change of ownership
New owners must meet the brand’s requirements from day one.
Brand-level litigation
Plaintiffs often sue both the franchisee and the franchisor, testing additional insured coverage.
Legal and contract requirements to know
- Franchise agreements typically set minimum insurance types and limits, additional insured status for the franchisor and affiliates, and certificate delivery requirements.
- Many agreements require waiver of subrogation and primary, non-contributory wording.
- Agreements may set minimum financial ratings for the insurers that write the coverage.
- A lapse or non-compliant certificate can be treated as a default under the franchise agreement.
How the lodging exposures apply to a franchise hotel
| Exposure | Relevance | What it means for this class |
|---|---|---|
| Liquor liability and dram shop | Situational | Depends on the brand tier: limited-service franchises rarely need it, while select- and full-service brands with bars do. |
| Pool, hot tub and spa | Core | Most brands require pools to meet standards; insurers review them closely. |
| Innkeeper's liability (guest property) | Core | Brand standards and state law both shape safe and notice practices. |
| Franchise brand insurance requirements | Core | The central exposure: limits, additional insured status, endorsements and certificate deadlines are dictated by the agreement. |
| Assault and battery; human trafficking liability | Core | Plaintiffs often sue both franchisee and franchisor; training and policy terms matter. |
| Shuttle and courtesy vans; valet and garagekeepers | Situational | Shuttles and valet trigger auto and garagekeepers requirements. |
| Equipment breakdown (boilers, HVAC, elevators, laundry) | Recommended | Brand standards rely on systems that must stay operational. |
| Business income and seasonality | Core | Business income must include brand re-inspection time after a loss. |
| Named storm and wind | Situational | Coastal franchisees face named-storm deductibles. |
| Cyber and PCI (booking systems, guest data) | Core | Franchisees remain responsible for property-level data security. |
| Employment practices (high-turnover hourly staff) | Core | Large hourly workforces generate employment claims. |
| Workers' compensation | Core | Required by law and brand; 9052 and 9058 in NCCI states. |
Innkeeper’s liability for guest property
Brand standards often specify safes and guest notices, but the legal effect depends on state innkeeper law. Make sure brand-supplied notices meet your state’s wording and placement requirements.
Confirm that innkeeper’s legal liability is included and that the franchisor is named where required.
Innkeeper’s liability is set by state statute and the details differ from state to state. Confirm your state’s current requirements with counsel or a licensed agent — start with your state’s hotel & lodging page below.
Real claim scenarios
Default notice over a missing endorsement
A renewal omits the primary and non-contributory wording; the brand sends a notice. Correcting the endorsement resolves it.
Trafficking suit naming the brand
A plaintiff sues the franchisee and franchisor. Additional insured coverage and exclusions decide defense.
Renovation contractor injury
A contractor’s worker is hurt during a PIP. Contractor certificates protect the hotel.
Pool injury at a branded property
A guest is hurt in the pool; general liability responds.
What lenders, brands and clients demand
- Franchisor and affiliates as additional insureds
- Primary and non-contributory wording
- Waiver of subrogation
- Certificate delivery deadlines
- Minimum insurer financial ratings
Limits and deductibles
Brand-required limits vary by agreement and change over time; always check the current version. Make sure umbrella coverage extends to additional insureds.
Staying compliant
Keep a copy of the current insurance requirements, review them at each renewal, and confirm every endorsement before certificates go out. A compliance checklist prevents default notices.
Hotel & lodging rules by state for franchise hotels
Each state page covers that state’s innkeeper’s liability law, liquor licensing posture, pool-safety code and lodging-tax treatment.
The coverage stack for franchise hotels
Most owners in this class start here. A licensed agent will confirm what your contracts, state, and payroll actually require.
Commercial Property Insurance
Covers the building and business income, meeting lender and brand requirements.
How it worksCommercial Umbrella Insurance
Provides the higher limits many franchise agreements require.
How it worksWorkers' Compensation Insurance
Required by law and typically by the franchise agreement.
How it worksEmployment Practices Liability Insurance (EPL)
Often required by brands and important for large hourly workforces.
How it worksCyber Liability Insurance
Addresses franchisee-level data breaches and PCI obligations.
How it worksWhat it typically costs
Franchise hotel insurance costs depend on service level, room count, the brand’s required limits and the property’s loss history.
| Business size | What drives the cost at this size |
|---|---|
Limited-service franchise | Simpler operations, though brand-required limits still apply. |
Select-service franchise with bar | Alcohol and meeting space add liquor and event exposure. |
Full-service franchise | Higher required limits and more outlets increase program complexity. |
Pricing is set by each carrier and varies by state, limits, payroll, and loss history — this is not a quote.
What moves your premium
- Brand-required limits and endorsements
- Service level and amenities
- Room count and construction
- Renovation or PIP activity
- Loss history
- Number of properties owned
Franchise Hotels insurance questions
Workers' comp class codes for this work
These are the classifications most often used to rate this kind of work. Final assignment always comes from the carrier's underwriter.
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