Jane Dotson
Hotels are exposed to a variety of risks, including property damage, guest and staff injuries, and theft. To protect themselves from liabilities and expensive lawsuits, hotels need to have a comprehensive insurance policy in place. The type of insurance coverage a hotel needs depends on its unique circumstances, such as its location and the amenities it offers. For example, a hotel with a waterfront location may require coastal business property insurance, while a hotel that serves alcohol should have liquor liability insurance. Other types of insurance that hotels typically need include general liability insurance, public liability insurance, commercial property insurance, and workers' compensation insurance. By having the appropriate insurance coverage, hotels can ensure that they are protected from financial losses and legal consequences in the event of an accident or incident.
What You'll Learn
General liability insurance for hotels
General liability insurance is one of the most essential types of hotel insurance. This type of insurance provides protection from third-party personal injury claims and property damage claims. For example, if a guest is injured on the premises or their laptop is damaged, general liability insurance will cover the compensation amount. It also covers advertising injury, products and completed operations, and legal defence costs.
The average cost of general liability insurance for small hotels is about $84 per month or $1,008 per year for a $1 million policy. The premium is driven by factors such as the size of the hotel, the number of stories, amenities offered, and loss history.
Hotels with unique risks, such as those located near the ocean or with exterior room entrances, may face higher premiums or struggle to find insurers.
Public liability insurance for hotels
Public liability insurance is an essential type of cover for hotels, protecting them from third-party claims. Hotels are busy places with guests, staff, and suppliers constantly coming and going, so the risk of accidents is high. Public liability insurance covers personal injury claims and property damage claims from third parties, including guests, suppliers, and staff. For example, if a guest or staff member slips, trips, or falls and is injured on the premises, public liability insurance will cover the financial costs associated with the incident. It can also cover damage to a guest's vehicle.
Public liability insurance is particularly important for hotels because, without it, they could be forced to pay out huge sums in compensation, which could put a significant dent in their finances. It also protects the hotel's reputation, which is crucial for businesses that rely on providing a quality service to their guests.
Public liability insurance is just one type of cover that hotels may need. Other types of insurance that hotels should consider include:
- Commercial property insurance
- Commercial auto insurance
- Workers' compensation insurance
- Hospitality indemnity insurance
- Liquor liability insurance
- Cyber liability insurance
- Employment practices liability insurance
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Commercial property insurance
In addition to covering physical structures, commercial property insurance can also protect the hotel's business contents, including expensive pieces of equipment, kitchen appliances, CCTV cameras, computers, POS machines, and stock of food and ingredients. This type of insurance can also provide stocks and contents coverage, as well as business equipment and tools coverage, reimbursing losses caused by fire, theft, vandalism, and other covered perils.
Another aspect of commercial property insurance is business interruption coverage, which comes into play when a hotel suffers a loss that leads to temporary closure. This coverage helps the hotel stay afloat by providing financial support to cover lost income during the period of restoration.
When crafting a commercial property insurance policy for a hotel, it is crucial to consider the unique characteristics of the business, such as its location, size, amenities, and services offered. By tailoring the insurance package to the specific needs of the hotel, owners can ensure they have adequate protection against potential risks and liabilities.
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Commercial auto insurance
In most states, commercial auto insurance is required for any company-owned vehicles used for business. This includes vehicles owned by the business, as well as personal, rented, or leased vehicles used for work purposes. It's important to note that a personal auto insurance policy typically does not cover accidents that occur while using your vehicle for business-related activities. Therefore, a separate commercial auto policy is necessary to protect your business from legal and financial risks.
- Damage to your vehicle(s)
- Injury to someone else
- Damage to someone else's property
Additionally, it offers liability coverage, collision coverage, comprehensive coverage, medical payments/personal injury protection, and uninsured motorist coverage. The specific types of coverage and requirements may vary by state.
When determining the cost of commercial auto insurance, several factors are considered, including the type and value of the vehicle, the level of risk involved, employee driving records, policy deductible, and coverage limits.
If your hotel owns any vehicles, it is essential to have commercial auto insurance to protect your business from liabilities arising from vehicle use and damage to the vehicles themselves. This is particularly important if you use the vehicles to transport guests, as you will want high liability limits to safeguard your business from potential lawsuits in the event of an accident.
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Workers' compensation insurance
In the context of hotels, workers' compensation insurance is particularly relevant for employees who may be injured while working. This includes employees who work in various areas of hotel operations, such as front desk staff, housekeeping, restaurant staff, and more. If an employee is injured while working at a hotel, the workers' compensation insurance policy will provide them with medical treatment and wage replacement benefits during their recovery.
It is important to note that workers' compensation insurance does not cover injuries that occur outside of work, including those that occur during the commute to and from work. Additionally, it is worth mentioning that workers' compensation insurance is usually purchased by employers, and the specific benefits provided are typically written in the statutes of the state where the employees reside.
When billing for workers' compensation insurance, it is crucial to utilize the correct forms, such as the First Report of Injury Form and the CMS-1500 claim form. The physician or medical provider is responsible for completing the First Report of Injury Form when a patient first seeks treatment for a work-related illness or injury. The CMS-1500 claim form, along with the physician's documentation, is then submitted to the workers' compensation insurance company for reimbursement. It is important to include the date of injury on the CMS-1500 form, as this is often overlooked.
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Frequently asked questions
Hotel insurance is purchased by hotel owners to protect their business from various forms of damage and litigation. It covers property damage, lawsuits, and other risks associated with operating a hotel.
The types of insurance a hotel needs can vary depending on its specific operations and amenities. Some common types of insurance for hotels include commercial general liability, commercial property, commercial auto, and workers' compensation insurance.
To bill insurance for services rendered at your hotel, you will need to create and submit invoices or bills to the insurance company. These should include detailed descriptions of the services provided, dates, and any associated costs. It is important to keep accurate records and documentation to support your claims.
Note: This answer assumes a general context of billing insurance companies for services provided to guests or customers of the hotel, rather than billing for insurance coverage or premiums related to the hotel's own insurance policies.
