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All You Need to Know About Hotel & Motel Insurance in 2022

Apr, 25 2022

Hotel Insurance

All You Need to Know About Hotel & Motel Insurance in 2022

If you run or manage a hospitality business, hotel & motel insurance provides you business protection coverage. Hotel and motel coverage can protect your hospitality business from various kinds of litigation and damage. All the potential lawsuits and property damage don't necessarily emanate from your standard hotel operations. Many hotel businesses are exposed to added risk because they have additional operational areas, including:

  • Restaurants
  • Special event facilities
  • Pools
  • Spas
  • Conference centers
  • Golf courses
  • Fitness centers
  • Business vehicles

If you own a hospitality business, you should consider addressing the unique risks you're exposed to. Hotel insurance enables you to transfer certain risks to your insurer instead of bearing them all. Your insurance policy can be customized to suit your needs. For instance, a hotel with luxury amenities like spas, golf courses, and fitness centers will have different insurance needs than a motel that only offers bed and breakfast services. 

Types of Hotel Insurance Coverages

Here are common hotel insurance coverages that you should consider getting for your hospitality business:

  • Commercial General Liability - Commercial general liability insurance is the bedrock of your facility's liability insurance. Ideally, you should get this policy regardless of your hotel's size, operations, or location. This policy covers third-party property damage and bodily injury liabilities. This is an essential coverage because you have guests and suppliers coming to and exiting your building, interacting with your staff, and using your facilities such as pool or gym equipment.
  • Commercial Property Insurance - Because of the nature of hotel businesses, real estate takes up a huge share of the hotel owners' capital and investments. Commercial property insurance protects the owners' property in case of catastrophes. This policy covers your building as well as the property inside those buildings. It can also cover some of the property outside your buildings. You should, however, note that earthquake and flood policies are usually not included in property insurance policies. If you're located in an area prone to these perils, you should get additional coverage for these specific events.
  • Commercial Auto - Commercial auto insurance covers liabilities resulting from the use of your hotel-owned vehicles and damage to the vehicles. If you use your vehicles to transport guests, your policy should ideally have high liability coverage limits to protect against potential lawsuits in case of an accident.
  • Equipment Breakdown - Hotels are usually located within large buildings which contain costly equipment like security systems, HVAC systems, communication systems, and walk-in freezers. Equipment breakdown covers your equipment in case it's damaged by incidents like power surges or accidental and sudden damage.
  • Workers' Compensation - You're legally required to carry workers' compensation insurance if you have one or more employees. Workers' comp insurance covers employees' work-related injuries and lost wages. Workers' comp benefits are determined by your state's workers' comp legislation.
  • Cyber Liability - Cyber liability coverage covers financial liabilities resulting from cyber-attacks and data breaches.
  • Garagekeepers & Non-Owned Liability  - If your establishment offers valet services (an employee drives and parks guests' vehicles), you should carry Garagekeepers & Non-Owned Liability insurance. This policy kicks in if a guest's vehicle is damaged while being driven by your employee.
  • Liquor Liability Insurance - Liquor liability/dram shop insurance is vital if your establishment serves alcohol. This coverage covers certain liabilities resulting from selling and serving alcoholic beverages. For instance, if a patron is involved in an auto accident after being over-served by your bartender, you may be liable for the resulting damage.

How Riverbend Insurance Can Help

Increasing weather severity, labor shortages, effects of COVID-19, and high vacancy rates have led to increased hotel insurance rates. If you are looking for affordable and customized hotel insurance, contact us at Riverbend Insurance today!