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How to Find Competitive, Comprehensive Insurance for Hotels and Motels
Discover the essential types of insurance for your hotel, motel, or bed & breakfast. Our guide walks you through what affects the premiums you get, and how you can find your best policy.
Hotels, motels, and other kinds of hospitality properties are investments that need to be protected. There's no one-size-fits-all single policy that's the best for each property or business, and this makes sense, given the diversity of hospitality properties across the U.S.
In this guide, I'll take you through the types of coverage you need to consider, along with what can impact your insurance premiums and how to find the best policy out there for your needs.
Types of Insurance Coverage for Hospitality Properties
Hospitality properties need a comprehensive insurance package. Not all of the types listed below are required for every hotel, motel, bed and breakfast, and inn, but this is an at-minimum basic checklist to help you understand your risk exposure.
Keep in mind, if you just own the real estate — but not the hotel business operating inside it — your insurance needs will likely be far less extensive. Still, it's essential you understand the insurance on the hotel business side, as requiring your tenant has appropriate insurance is a key way to reduce your own risk.
- Property insurance: Covers damage to the building from perils like fire, storms, and vandalism.
- Contents insurance: Sometimes included in a property insurance policy, this type of insurance ensures your removable items (in the case of a hotel, think TVs, mini fridges, other furniture, and so on) are covered.
- Business interruption insurance: Provides financial support for lost income and ongoing expenses if the property is forced to close due to a covered event.
- General liability insurance: Protects against lawsuits arising from injuries, accidents, or negligence on the property.
- Liquor liability insurance: Essential for properties that serve alcohol, covering legal expenses and damages related to incidents involving intoxicated guests and protecting your business from alcohol-related liability claims.
- Garage keepers liability insurance: Covers damage to guests' vehicles while in the property's care, custody, or control.
- Cyber liability insurance: Safeguards against data breaches and cyber attacks, covering costs associated with notification, credit monitoring, and legal fees.
- Employee dishonesty coverage: Protects against financial losses caused by employee theft, fraud, or embezzlement.
- Specialized insurance types: Depending on your specific property and its location, you may need to take out flood or earthquake insurance, or even more specialized policies for swimming pools, golf courses, and so on.
Unique Risks and Challenges in the Hospitality Industry
So why can insurance be so complicated for businesses and real estate in the hospitality industry? A few reasons, really.
For one, there's higher guest turnover and significantly higher foot traffic than, say, a multifamily property. Each person walking through your doors adds to your potential liability risk, so insurers are keen to cover their bases here.
Second, many hotels (especially larger ones) serve food and alcohol. Each of these carries additional risk, and there are unique insurance products that handle those.
There are also larger risks outside of these, from employee theft and fraud to even cybersecurity risks. These may seem unlikely, or maybe not severe enough to cover, but if you aren't prepared, they can be devastating to your business.
Factors Affecting Hospitality Insurance Premiums
Many factors play a role in driving what you can expect to pay for insurance for your hotel or motel. Location's obviously a big one, but also the age of the property, how it's constructed, the number of guestrooms and number of employees can significantly affect your premiums.
One thing many hoteliers overlook is the impact amenities can have on insurance costs. If your property has a swimming pool or a fitness center, this can drive costs up astronomically.
Finally, the claims history of the property and business owners can affect your premiums.
The list so far as been all negatives, but there are some things you can implement to drive your costs down, too. Consider safety certifications and training for your staff, plus enacting a robust risk management program and not leaving maintenance issues on the backburner can all work in your favor.
Protect Your Hospitality Investment With Janover
Janover Insurance Group offers unparalleled access to thousands of insurance products from top-rated insurers. Our deep expertise in hospitality risks allows us to create customized solutions that ensure you have the right coverage — at the most competitive price.
Don't let rising insurance costs jeopardize your hospitality investment. Contact Janover Insurance Group today and get a free consultation to understand what types of insurance are right for you.