Hotels and motels are hospitality establishments and are always at risk of damages caused by guests, damages to guests, or natural disasters. No business owner wants to have to spend out-of-pocket costs that aren’t related to business growth.
Hotel hospitality insurance is specifically designed to meet the needs of hospitality establishments. It is a package policy, which means one policy contains several individual coverages. The coverages can be customized to suit the needs of each establishment.
Types of Hotel and Motel Hospitality Insurance
Hotel and motel hospitality insurance policies include lots of coverages. These coverages can be grouped into two broad types: liability coverages and property coverages.
Liability coverages include
- Workers’ compensation
- Food-borne illness
- Premise’s pollution
- Employment practices
- Commercial vehicle
Property coverages include:
- General property
- Equipment breakdown
- Crime insurance
- Business interruption
- Food spoilage
- Utility interruption
What Affects the Cost of Hotel Insurance?
Hotels provide hospitality services to guests which exposes them to lots of potential risks. A hotel can be sued by a guest who sustains an injury while using a property facility. Food poisoning or food-borne illnesses that develop after eating at the establishment can also lead to lawsuits. Most hotels have hazardous fixtures like indoor pools, which can cause grievous accidents or death. Hotels and motels are exposed to many perils. They need to have robust insurance policies to offer sufficient coverage to help protect against these perils.
Hotel Insurance Coverage Explained
Ensure that you purchase maximum coverage for your hotel and motel because businesses such as these usually have high risks. Protect yourself in case of a lawsuit or property damage to avoid out-of-pocket costs that can be detrimental to business growth. The two main types of insurance are liability and property coverage. Here are some more details of what is included under each.
Liability insurance covers things such as:
- Worker’s Compensation – It covers the costs of medical expenses in case your employees get injured while on duty.
- General Liability – It covers the financial costs for injuries sustained or property damaged by guests.
- Foodborne Illness – It covers the liability cost of a lawsuit if the food served in your hotel is spoiled and contaminated.
- Liquor – If a guest gets drunk at your hotel and causes property damage or injuries to themselves or others, the costs will be covered.
- Premises Pollution – If your property gets contaminated with mold or other pollutants that cause grievous health conditions, you may face liability for medical and clean-up costs which are covered under this type of insurance.
- Employment Practices – If you ever get a lawsuit from an employee, this coverage will protect you from high court expenses.
- Cyber Liability – This plan covers all internet-related losses, including cybercriminal and data breaches. Every hotel is at risk of cyber-attacks aimed at defrauding the guests.
- Commercial Vehicle – This covers all vehicles used by a hotel such as vehicles that are used to cart people around town and take them to and from the airport.
Property insurance includes things such as:
- General Property – If any of the hotel’s furniture is lost or damaged, general property insurance will cover the costs.
- Equipment Breakdown – If your computer system fails, causing significant revenue loss, this plan ensures that all your lost income will be reimbursed.
- Business Interruption/ Loss of use – If your guests must vacate the building because of an emergency like a fire, this coverage will provide you with enough income to pay your employees and recover lost wages.
- Crime Insurance – This coverage protects your hotel if an employee is involved in illegal activities on the job.
- Food Spoilage – Food spoilage due to poor storage or power outage will be covered under this coverage
- Utility Interruption – This plan protects from issues with utilities and associated costs. You may need to move the guests to another location. The costs that arise from such a situation will be covered with a utility interruption policy.