Hospitality insurance covers a wider range of risks than other business insurance policies. It’s typical for a hotel or motel to get a Business Owner’s Policy (BOP) and add other coverage.
A dedicated hospitality insurance program might be the best way to go if your business is too big to be covered by a BOP plan. One of the main factors that make the hospitality industry different from other industries is that it involves stay-over guests, which increases liabilities.
Any business that offers lodging facilities should consider hospitality insurance. This includes hotels, motels, hostels, and bed and breakfast inns. A BOP plan covers the basics of hospitality insurance, as it’s a combination of commercial property insurance and general liability insurance.
Here are some of the critical types of coverage that a hotel or motel requires to ensure its financially protected:
- General liability – This coverage pays for losses or injuries experienced by a guest caused by the facility or its staff.
- Cyber liability – If hackers invade your network, this coverage pays for damages to computing devices and other losses related to a breach.
- Workers’ compensation – Required by all states for businesses with a certain number of employees, this coverage pays for medical bills and lost wages owed to workers injured on the job.
- Commercial auto – Another state requirement for companies that own vehicles, this coverage pays for damages caused by your company drivers. It may also cover damages to your vehicles.
- Employment practices liability – If an employee accuses your business of discrimination, harassment, or other unethical practices, they can go to court. This coverage pays your company’s legal fees, including settlements.
- Premises pollution liability – If a guest becomes ill due to mold infestation or other pollutants, this coverage pays for their hospital bills. It may also pay to clean your facility.
- Liquor liability – You need this coverage if your establishment serves alcohol. It protects against damage caused by drunk patrons to others.
- Illnesses from food – This coverage is necessary if your hotel or motel serves food to guests. It will protect your company from lawsuits related to food-borne diseases.
- General property – Protects against theft, vandalism, and damage to your commercial property
- Business interruption – Pays expenses if your business is forced to shut down temporarily
- Equipment malfunction – Covers equipment repair and lost income
- Food spoilage – Pays to replace food spoiled due to a power outage
- Utility interruption – Covers loss of revenue due to a power outage
- Crime – Protects against employee theft