Hotels are sizable properties that require extensive upkeep and management for smooth operations. Hotel owners typically carry insurance to protect against unexpected events and potential risks.
Hotel insurance is designed to protect against various forms of damage and litigation that may occur within the hotel itself or in attached properties, such as conference centers, swimming pools, golf courses, spas, fitness centers, or restaurants.
Accidents can happen at any time, and it is important to be prepared to address these risks. Insurance policies can be tailored to meet the unique needs of a hotel based on factors like size, location, and types of amenities offered.
Learn more about what hotel insurance covers and what types are generally recommended for hotels.
What Is Hotel Insurance?
Hotel insurance refers to policies designed specifically to meet the needs of hotel businesses. In the hospitality industry, many potential hazards could jeopardize a business.
Hotel insurance is a broad term that includes different types of lodging providers, such as franchised hotels, resorts, company-owned hotels, boutique hotels, private-label properties, independently-operated hotels, motels, bed and breakfast operations, destination resorts, and similar businesses.
What Type of Insurance Do Hotels Need?
Businesses in the hospitality industry are responsible for providing guests with a safe, comfortable, and secure environment. The best way to achieve this goal is by having the proper precautions in place to protect against hazards. The following types of insurance are recommended for hotels:
1. Commercial General Liability Insurance
Commercial general liability (CGL) policies protect businesses from financial losses resulting from property damage, personal injury, or advertising injuries caused by services rendered, business operations, or employees.
CGL is designed to cover non-professional negligent acts. A commercial general liability policy will generally cover the expense of a hotel owner’s legal defense and may pay for damages up to the limit on the policy.
2. Commercial Property Insurance
Commercial property insurance helps protect a hotel owner’s physical assets from unexpected events, such as an explosion, fire, storm, vandalism or theft.
Additional coverage can also be purchased to cover other unforeseen events, such as earthquakes and floods. A commercial property insurance policy will typically cover the building that houses the business, all office equipment, essential documents, machinery, inventory, fencing, landscaping, and signs.
3. Commercial Auto Insurance
Commercial auto insurance is a business policy that applies to any automobiles owned or used in business operations. A standard policy provides coverage for collision, liability damages, comprehensive physical loss to the automobile, damages sustained by occupants, and medical expenses for injury to any occupants of the vehicle.
4. Equipment Breakdown Insurance
Equipment breakdown insurance covers any damages sustained from electrical or mechanical breakdown of equipment. This damage is usually caused by internal forces, such as electrical shorts, power surges, motor burnout, mechanical breakdowns or operator error.
Covered equipment in a hotel may include heating or air conditioning equipment, emergency generators, computer equipment, solar panels, sump pumps, kitchen appliances, and similar types of equipment.
5. Workers’ Compensation Insurance
Workers’ compensation insurance provides wage and medical benefits to employees who become ill or injured at work. Each state mandates this coverage, and benefits can vary based on location.
Many policies pay out death benefits to families of employees killed on the job and standard medical expenses, rehabilitation costs, and lost wages.
6. Cyber Liability Insurance
Cyber liability insurance helps protect businesses from data breaches and other types of cyber security issues. With coverage, hotel owners can help pay for forensic investigations, business interruption, litigation, crisis management, regulatory defense, cyber extortion, and other costs that may arise due to a major breach.
7. Liquor Liability Insurance
Any hotel that sells or serves alcohol requires liquor liability insurance. Liquor liability insurance can help cover claims of assault and battery, drunk driving, and property damage caused by a guest under the influence.
This policy may also cover legal costs, judgments or settlements, medical bills to treat a related injury, or repair costs to fix property damage.
8. Garagekeepers & Non-Owned Liability Insurance
Garagekeepers and non-owned liability insurance protect in the event that a guest vehicle is damaged by collision, fire, vandalism, theft, or other covered events.
It is designed to protect the property of customers who may park at the hotel. Garagekeepers’ insurance generally excluded coverage for the content of guest vehicles.
Request an Insurance Quote
Atlas Insurance Agency has served businesses in Honolulu, HI, and the surrounding areas for over 90 years. With a hotel insurance package from Atlas, hotel owners can stay protected from various risks and liabilities.
Learn more about hotel insurance by contacting Atlas Insurance Agency today at (808) 400-6680 or request an insurance quote online.