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Whether you’re running a 5-star lodge that caters to pop stars or a nightly motel that caters to late-night travelers, your hospitality business will face its fair share of risks. And with those risks, comes a need to protect your business and all that comes with it.
Fortunately, here at First Underwriters, we are here to eliminate the hassle of searching on your own by walking you through a hand-picked selection of top insurance policies to cover both your business and your employees.
But first, let’s talk more about the protection you need and why you need it.
What Risks Do Lodges Face?
In 2011, Tara Kimkee Tan, a former resort manager at a lodge in New York City suddenly went into labor during her shift.
She gave birth in a guest room at the hotel, and then sued the resort for $10 million, claiming she was rushed out carelessly by the hotel supervisors after delivery, wasn’t offered maternity leave, and was fired four months later.
It’s important as a hotel owner to be prepared for these situations, as the hospitality industry faces high profile lawsuits each year. And the only way to properly protect your business is with a proper set of hotel insurance policies.
Lodge Insurance Coverages
Insurance exists for the purpose of protecting persons and organizations from the adverse financial consequences of certain unpredictable events, regardless of the coverage line being considered. For general liability insurance, the unpredictable event that constitutes the subject of the insurance is a claim of legal liability arising out of a company’s operations, premises, products, and completed work.
Many hotels have limo or shuttle service available to cart people around town or 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..
Garagekeepers is coverage provided under a garage policy for auto and trailer dealers, particularly those dealers that maintain a service department or body shop, for liability exposures with respect to damage to a customer’s auto or auto equipment that has been left in the dealer’s care for service or repair, for example. For other types of auto-related businesses, such coverage is available under the garagekeepers coverage endorsement (CA 99 37). Coverage is contingent on establishing liability on the part of the insured.
The hired auto and nonowned auto liability endorsement is appropriate for use only if the insured entity does not own any automobiles. In fact, ISO Commercial Lines Manual rules specify that the endorsement is not available to insureds that have another policy covering commercial auto exposures. It provides coverage for bodily injury and property damage liability in connection with just “hired autos,” just “nonowned autos,” or both, as indicated in the endorsement schedule.
Commercial property is the policy that an organization purchases to pay for damage to its own buildings and the personal property in them. A commercial property policy can also cover loss of income or increase in expenses that result from insured damage to buildings and their contents.
If an employee’s injured on the job, your business is required to cover any resulting medical expenses. Every state has its own workers compensation requirements, but your hotel business insurance can include this coverage to help meet your state’s laws.
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 will help protect you from any resulting liability costs.
If your hotel includes a bar or offers alcoholic beverages through room service, you’ll need liquor liability insurance. It protects you if a guest becomes intoxicated due to your negligent service of alcohol and causes property damage or bodily harm to themselves or others.
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.
If your computer and data management system is breached, it can give cyber criminals access to your guests’ personal information, including names, addresses, and credit card numbers. If this happens, you could be responsible for providing all affected guests with credit protection services and could face harsh penalties. Cyber liability insurance provides protection from internet-related losses.
This insurance protects you from losses associated with lawsuits brought against your business by employees alleging harassment or discrimination.
You can protect your hotel from losses stemming from guest and employee theft. If an employee engages in some shady illegal behavior while working at your hotel, this insurance can provide compensation for your losses.
- A utility outage can have serious consequences. If there’s no running water, your hotel will need to close its restaurant and may need to move guests to a new location. Utility interruption coverage can provide compensation for any losses accrued due to a sustained utility outage.