Hotels and motels are an integral part of the service industry, providing a comfortable, safe place to rest while on vacation. To protect the hotel from the cost of covering any damages from liabilities or hazards, hotel insurance is a must. Hotel insurance can offer protection in a wide variety of situations, but what sets it apart from more generic business insurance policies is hotel insurance is customized for the hotel industry.
Hotel insurance is made up of two main components, property hotel insurance and liability hotel insurance. Both the property and liability coverage can then be broken down into what it specifically covers. The property coverage of hotel insurance protects both hotel property and the property of the guests staying there. In the event of damage to the property, business income coverage in hotel insurance protects from loss of business. In a hotel where damage to one room can quickly affect many, this aspect of hotel insurance is surprisingly important. Other property related hotel insurance coverage protects from theft by employees and equipment failure, such as computers and other important appliances related to operating your hotel.
In the service industry, liability coverage is just as important, if not more important, since guests and employees who feel they have been put down can easily file a lawsuit, whether substantiated or not. Even bogus claims can cost thousands of dollars do defend the good name of the business. Hotel insurance protects from the costs of both guest and employee liability claims. A guest that slips and falls on a spill in the breakfast area can be a costly customer if hotel insurance is not around to cover the cost of legal expenses and other damages possibly awarded. Hotel insurance even covers liability claims by employees if they get hurt on the job or file a civil claim for discrimination.
Something else to think about for hotel owners is that franchised properties may require umbrella insurance in addition to standard hotel insurance. Umbrella insurance is just another layer of financial protection. It covers above and beyond when the premiums of the hotel insurance are reached by the cost of the damages. Umbrella insurance is a great second line of defense, especially for larger hotels where paying for a higher premium on a standard hotel insurance policy might be cost prohibitive.
Insurance is an important line of defense for many costly situations facing businesses daily. For hotels, customized hotel insurance has the potential to preserve the property in the face of seemingly irreparable damage or a strong liability suit.