Hotel & Motel Hospitality Insurance

Hotel and Motel Insurance

The protection of your Business is an undeniable necessity. Like any other business, the hospitality industry faces many risks that can make a booming business fall apart within a few minutes. Whether you own a 7-star hotel that provides residential facilities to pop stars and celebrities or a nightly Motel that caters to travellers’ and bypassers’ needs, you will face a particular dress.

Fortunately, we have policies such as Hotel Insurance and Motel hospitality insurance to prevent businesses from several significant risks leading to financial loss and crisis. Before we understand the policies and their coverage, let’s first discuss the risk and potential dangers you, as a hotel owner, can face throughout your Business.

What are the significant risks involved in the Hospitality industry?

If you remember, in 2011, a former Hotel manager at the Standard Hotel in New York city namely, Tara Kimkee Tan, sued the Hotel for $10 million after she was carelessly rushed out after the delivery of her child, the Hotel supervisor, after getting into labour during her shift. She was fired after 4 months. She claimed that the maternity leave was also not offered by the Hotel, leading to search lawsuits.

Another such incident happened when an unknown man was given the room key to Wall Street banker Allison Fournier’s room by none other than the Starwood hotel itself. Predictably, she sued the company for the damages.

Such silly mistakes are enough evidence for the owners of hotels and motels to be prepared for unwanted situations that can lead their business profile to suffer under the lawsuit. Therefore, the only way you can protect your Business from material and financial losses is through a hotel insurance policy.

What are Hotel insurance coverages needed?

From several insurance policies, some coverages are essential for your Business’s protection. However, some coverages may or may not be necessary for your business needs. Given below are some of the general needs that every hotel owner needs to have. Take a look at them to know more:

⦁ Medical insurance.

If you have more than 50 people employed working full-time, it is compulsory by the Affordable Healthcare Act for you to provide employer-subsidized health Insurance to your employees. This is the basic need of the hospitality industry and every other industry present.

⦁ Unemployment insurance.

Enforced by law, this coverage is included as a part of your state taxes. As soon as you start paying taxes, your Business will be covered under the unemployment insurance policy. All you have to do is establish and register your Business under the States workforce agency.

⦁ Business insurance.

To protect your business from financial losses caused due to accidents, natural disasters, rampant, and other such disasters, business insurance is necessary insurance coverage that is required for the protection of all the businesses existing, including the hotel and motel businesses.

⦁ Disability insurance.

For the hotels and motels located in Hawaii, California, New York, New Jersey, Rhode Island, and Puerto Rico, disability insurance is compulsory by the law, which provides medical assurance and security to the disabled or people with special needs.

Now, let’s dive deep into the actual insurance and study the liability coverages provided by the insurance policy that is helpful for a hotel business.

What is Hotel Business Insurance? And why should you care?
Hotel and Motel Hospitality Insurance or hotel business insurance is a specific type of insurance policy that comes under the BOP, which is customized to meet the unique requirements of your Business. With the number of coverage options available, BOP allows you to choose the right coverage with freedom.

Liability Coverages provided by the Hotel Insurance

Depending on the type of Business and other intervening factors, there are different liability risks faced by the owners and managers of hotels in the hospitality businesses. This is why adequate Hotel liability insurance is the only way to protect the financial health of your Business and make its reputation rise in the market. Some general liability coverages that are available for you to include in your hotel insurance policies are as follows:

  • General liability. This is the most basic liability coverage that protects your Business from injuries and property damages caused by the guests at your Hotel.
  • Commercial auto liability. Commercial auto liability coverage is for the protection of all those vehicles that your Hotel owns. Generally, hotels that range from 3 stars to 7 stars provide automobile rentals such as cabs, vans, and even Limos for the VIPs
  • Workers compensation. As the name suggests, if your employee gets injured during work hours at your business premises, then the medical expenses will be covered by the worker’s compensation insurance coverage. Workers’ compensation requirements vary in every state, but your hotel business insurance can include the coverage to be on the same page as your States law.
  • Liquor liability. If you want to include a bar and your Hotel from me or want to offer alcoholic beverages through room service, then liquor liability coverage is your utter requirement. You need this coverage because if a guest becomes intoxicated due to overconsumption of alcohol and causes physical injuries to themselves or others or property damages, the coverage will help protect your business’s security.
  • Foodborne illness liability. You must offer food services in the hospitality business, and so many hotels include a restaurant. If a guest gets sick from eating the food served by your Hotel and files a lawsuit against your business, this coverage will help protect you from the resulting damage.
  • Cyber liability. In this overly digitalized world, every Business nowadays operates digitally, and therefore the data entries of the guests that stay at the Hotel are marked on your websites. In case your computer or data management system gets hacked, the cybercriminal will get access to your guest person information, including their credit card numbers. This can cause severe damage to your company as well as to your guest. Such an incidence can lower your Hotel’s repetition, leading to further financial loss. The only way to prevent such incidents is by getting assignor liability insurance coverage to protect against such internet-related losses.
  • Premises pollution liability. Your Hotel is exposed to environmental changes and everyday visits of guests and visitors. If your Hotel gets contaminated by airborne pollutants such as moulds or moss, it can threaten the guest’s and your employee’s health which may also result in liability charges. Premises pollution liability insurance coverage will help you cover clean-up costs and punitive fees
  • Employment practices liability. This coverage helps you protect your Business from the lawsuits posed by your employees alleging harassment or discrimination charges.

Coverages that include property and assets

When you open a hotel, a substantial financial investment is required for the activities related to management and growth. Search financial investments must be protected from damage and other rest leading to income loss. Some property-related coverages that are necessary and covered under the hotel insurance policy are as follows:

  • General property coverage. The furniture, electronics, valuable amenities, and expensive decor that your Hotel is filled with the need to be protected from getting damaged due to theft, vandalism, weather conditions, catastrophic events, and even the guests and visitors. For the security of your property, general property coverage provides compensation for the losses you suffer at a specific period.
  • Business interruption coverage. The temporary closing of your Hotel that it encounters leads to a financial loss of the income you could have earned during that time. When your Hotel suffers damage, it requires reparation work to be done. And therefore, to protect your Business’s financial securities, business interruption coverage compensates for the days your Hotel stays closed to repair the damage. This type of coverage is typically limited to a year.
  • Equipment breakdown coverage. Equipment breakdown causes a considerable hindrance to the functioning of the entire business framework. Especially in the hospitality industry, suppose the heat goes out, or the electricity cuts are preventing the guests from enjoying their leisure time with security can make them unhappy and cause substantial revenue loss. Even more, issues in the computing systems can cause reservations loss leading to angry customers. All such issues are covered by the equipment breakdown coverage policy that provides your Hotel with funds to repair damage as soon as possible.
  • Crime coverage. From losses, guest and employee theft crime coverage is the only coverage under the hotel insurance policy that will help you provide compensation for your losses.
  • Utility interruption coverage. A utility outage such as electricity cuts, water stoppage, or running out of food is all search issues that can irritate your guests. However, utility interruption coverage will compensate you for all your business’s losses during sustained utility outages.
  • Food spoilage coverage. Suppose the food of your hotel restaurant goes terrible due to equipment breakdown or Power failure. The amount of food loss can be enough to shake your financial stability; therefore, food spoilage coverage is required, which will compensate you for the loss of the wasted food.

Do Bed and Breakfast need Hotel insurance?

Small country inns and bed and breakfast establishments are ranked lower on the scale of hotels and motel businesses. Indeed, their requirements and insurance coverage needs are different. Such businesses take in fever customers daily and, therefore, where is in the amenities and facilities they provide.

These bed and breakfast and small country inns do not offer luxury services like swimming pools, fitness centres, restaurant facilities, personalized services, general room services, and other facilities. Due to all these factors, many insurance companies have specially designed and tailored policies for these smaller businesses that come at a lower rate than Hotel insurance policies.

And to answer the question, bread and breakfast and such small country inns do need insurance policies for their security and protection because they are at higher risk of suffering immensely from risks as they do not have enough capital income to protect themselves and their businesses from any lawsuit or property damage that may occur at any point of time.

General FAQs

Q. Can you cover more than one Hotel or Motel with the same hotel insurance policy?

Yes. If you own more than one Hotel or motel, you need to purchase a policy specially made for such adjustments. These adjustments are usually mentioned in a commercial policy. An insurance company may put a blanket coverage on the properties or individually schedule them all; both ways, a single hotel or a motel hospitality insurance can cover multiple properties.

Q. Can you get discounts for hotel and Hotel insurance?

The discounts depend on the company or the individual independent source you are buying insurance from. Typical discounts include fire and burglar alarm systems, safety programs, sprinkler systems, clean claims history, and the period you have held an insurance policy; all such factors can qualify you for discounts.

Got more questions? Ask Commercial Coverage Plus (h2)
Hotels and motels are the most common target of lawsuits every year. These lawsuits and their expensive costs can hinder the financial stability of even as big as a 7-star hotel. This is why having hotel and motel insurance is a basic need to protect your Business from the unseen damage. The cost of the Motel hospitality insurance depends on the location of a business and many other factors. However, it will still be less than compensating for the complaints against your company and using every other day to make its reputation go up in the market.

With all of the information, we would like to conclude our article, but if you still have questions left, then feel free to contact commercial coverage plus and get complete guidance with customized insurance solutions tailored to meet the needs of your Business by expert professionals.

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