Hotel and Hospitality Insurance

Whether you run a 5-star hotel in a big city that caters to celebrities or a small-town motel that caters to late-night travelers, your hotel business will face its share of risks. With those risks, ranging from fire damage to theft and beyond, comes a need to protect your business and all that comes with it. A complete hotel insurance policy can help you get the reimbursement your business needs after many common and unexpected hazards. 

Fortunately, an independent insurance agent can help you find the right hotel and hospitality insurance to cover your business and your employees. They'll walk you through a handpicked selection of policies and get you set up with the ideal amount of coverage at a great rate. But first, let’s talk more about the protection you need for your hotel and why it's necessary.

What Is Hotel Business or Hospitality Insurance?

Hotel-motel insurance, or hospitality insurance, is a specific type of business owners policy (BOP) tailored to meet a business's unique coverage needs. Businesses in the hospitality industry must have protection against many common threats, including guest injuries, fire damage, data breaches, and more. 

While hotels and motels are more obvious types of businesses that need this coverage, others that provide hospitality services to the public can also benefit from these policies. 

Who Needs Hotel or Hospitality Insurance?

Hotel insurance is a special type of business insurance designed to meet the needs of hotel owners. However, this coverage can also be found in policies known as hospitality insurance, which can apply to a few different kinds of businesses. You might need a hotel or hospitality insurance policy if you own or run any of the following:

• Hotels
• Motels
• Luxury resorts
• Casinos

Many elements of your hotel, motel, resort, or casino need protection. These can include:

If you're uncertain of what type of policy your business needs, work together with a local independent insurance agent. They can evaluate your business's risks and get you matched to the right policy.

Do I Need Hotel Insurance for My Bed and Breakfast?

Bed and breakfast establishments and small country inns tend to have slightly different insurance coverage needs. These businesses take in far fewer customers each night and provide different amenities to them. 

For example, a B&B typically doesn't offer room service, swimming pools, or fitness centers but does offer home-cooked meals, scenery, and personalized service. Many insurance companies offer special bed and breakfast insurance policies designed specifically for these smaller businesses, and they come at a lower rate than hotel or hospitality insurance policies.

Top Insurance Risks for Hotels to Consider

Those in the hotel and hospitality field deal with a number of risks faced by most businesses regardless of industry, as well as several hazards unique to their niche. Here are some of the largest threats faced by hotels:

Consider these potential risks and aim to get an insurance policy that addresses them all. Being prepared with a solid hotel insurance or hospitality insurance policy before disaster strikes can help your business avoid potentially hefty financial losses that could otherwise even result in bankruptcy.

Is Hotel Insurance Required?

If you run a hotel, certain types of coverage might actually be mandatory. As a hotel or motel owner, you’ll want to make sure you get the following types of insurance:

• Unemployment insurance: This coverage is required by law and is included as part of your state taxes. Once you establish and register your business with your state’s workforce agency and begin paying taxes, your business will be covered.
• Disability insurance: This coverage is required by law only if your hotel is in California, Hawaii, New Jersey, New York, and Rhode Island. Otherwise, it’s optional.
• Business insurance: This coverage is necessary to protect your business from extreme financial losses after natural disasters, accidents, and other costly problems you may face while running your hotel.

If you have a loan or lease on your business's property, your lender will likely require you to have at least one aspect of business insurance.

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What Does Hotel Insurance or Hospitality Insurance Cover?

The owners and managers of hotels and other hospitality businesses face many different liability risks. Having sufficient hotel liability insurance is vital to keeping your business financially healthy. 

Some of the many different types of coverage that are available with hotel insurance policies include:

• General liability insurance: This can protect your business from the cost of lawsuits related to injuries or property damage sustained by guests and other third parties.
• Workers' compensation insurance: If an employee gets injured or ill on the job, this insurance can cover any resulting medical expenses and partial wage replacement. Workers' comp. is required in many states for businesses with at least one employee.
• Commercial auto liability insurance: Many hotels have a limo or shuttle service available to transport guests to and from the airport. If your hotel owns these vehicles, you’ll want to be sure you have liability coverage that meets your state's minimum requirements.
• Foodborne illness liability insurance: Many hotels include a restaurant and room service. If the food you serve is contaminated with E. coli, salmonella, or any other foodborne illness and a guest gets sick, this coverage can help protect you from any resulting liability costs.
• Liquor liability insurance: If your hotel includes a bar or offers alcoholic beverages through room service, this coverage can protect you if a guest gets intoxicated and causes property damage or bodily harm to themselves or others.
• Premises pollution liability insurance: If your hotel becomes contaminated by mold or other airborne pollutants that can sicken guests, you may face liability charges. This insurance will help provide coverage for ensuing medical bills, punitive fees, and cleanup costs.
• Cyber liability insurance: This provides protection from internet-related losses, such as if guests' personal information, including names, addresses, and credit card numbers, is stolen or exposed.
• Employment practices liability insurance: This insurance protects you from losses associated with lawsuits brought against your business by employees alleging harassment, wrongful termination, or discrimination.
• Commercial property insurance: Your hotel is filled with furniture, electronics, décor, carpeting, and amenities. If property is lost or damaged due to theft, vandalism, fire, severe weather, or other catastrophic event, this coverage can help compensate you for your losses. 
• Equipment breakdown insurance: This can provide funds to repair damage caused by equipment failures and malfunctions, replace the broken equipment, and help compensate for lost income due to the covered failure.
• Business interruption insurance: If a covered event forces you to temporarily close your hotel for repairs, this coverage can provide you with sufficient income to help pay monthly expenses and employee salaries. This coverage is typically limited to one year.
• Crime insurance: This can protect your hotel from losses caused by guest and employee theft and other crimes or acts of dishonesty.
• Food spoilage coverage: If a power failure or equipment breakdown causes food in your hotel’s restaurant to go bad, you could face a large financial loss. Food spoilage coverage can compensate you for lost or spoiled food.

An independent insurance agent can help you assemble a complete hotel insurance or hospitality insurance policy.

Additional Coverage Options for Hotels and Hospitality Businesses to Consider

Many hotel, motel, and hospitality insurance companies offer additional types of coverage that could help you address any remaining exposures. Here are some additional coverage options to consider:

• Umbrella insurance: This additional coverage increases your existing liability limits and can save your business from bankruptcy following a catastrophic event.
• Hotel guest relocation services coverage: If a problem like a fire or a utility outage forces you to relocate your guests, this insurance coverage can compensate you for costs associated with moving guests and losses incurred by your hotel as a result.
• Event cancellation insurance: Many hotels rely on the income generated by renting out halls and banquet rooms for events. If an event needs to be canceled due to a covered cause like equipment failure or power outages, this insurance can cover the associated costs, including lost revenue.

Work with a local independent insurance agent to get your hotel or hospitality business equipped with any additional coverage it may still need.

How Much Is Hotel or Hospitality Insurance?

The cost of hotel or hospitality insurance can vary significantly based on a number of factors. These can include:

• The size and location of your business
• Your business's annual revenue
• The number of employees your business has
• Specific risk features or amenities present at your business
• Special events that take place at your business
• Your business's claims history

Working together with a local independent insurance agent is a great way to find affordable hotel or hospitality insurance near you.

Save on Hotel Insurance

Our independent agents shop around to find you the best coverage.

Request a quote

Here's How an Independent Insurance Agent Can Help 

Independent insurance agents can review your needs and help you evaluate which hotel insurance or hospitality insurance policy makes the most sense for your unique business. They'll also compare policies and quotes from multiple insurance companies to make sure you have the best protection out there at a competitive rate. And down the road, your agent can help you file business insurance claims or update your policy as necessary.