Hotel or Business Insurance Terminology can make your head spin, we’re here to simplify it for you.
Merrill Insurance has a goal to simplify insurance by explaining some important coverages relevant to Hotels that may stump you when you read through your policy.
It’s important to note that these summaries are to be used for basic information only, for more detailed information on your policy, exposures or your carrier’s coverage, please give us a call at the office for a review or to answer any specific questions related to your policy or your specific exposure. You should have an ongoing conversation with your agent to make them aware of all arms of your business to be sure that you have the appropriate coverages in place.
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Due to the volume of valuable items and equipment found in hotels (e.g., bedding, furniture, HVAC systems, laundry machines and decorative artwork), property exposures in hotels are numerous. Complicating matters, property damage can be caused by a variety of factors, including equipment failures, plumbing issues, poor wiring, natural disasters, guests, employees and other third parties. What’s more, water damage and fires have the potential to affect multiple rooms and floors, increasing costs and interruptions for your business.
To ensure the comfort of its guests, hotels depend on functioning equipment. In the face of equipment breakdowns (e.g., HVAC system failures, power outages and appliance malfunctions), hotels can experience business interruptions or even prolonged closures. What’s more, equipment breakdowns can even lead to major property damage should an appliance leak or start a fire.
Crime can be a challenge for hotels, especially as employees, guests and vendors all have the opportunity to steal from you. To make matters worse, thieves can strike at any time, leaving owners to recoup any lost funds or valuables. Thieves do not need direct access to cash to steal from you—equipment and supplies are all fair game. What’s more, in the event that a guest is the victim of a theft, you could be held responsible for the damages.
Depending on its size, hotels may have to manage the safety of hundreds of employees and guests on a regular basis. Because of the high number of individuals entering and exiting your hotel, premises liability exposures are significant and, when injuries occur at your business, you could be held responsible. Accidents related to slips, trips, falls, exercise equipment, swimming pools, balconies and unauthorized access to your building are common and major sources of concern. Something as simple as a wet floor or an uneven surface can lead to costly insurance claims following an incident.
Food and Product Liability
If your hotel has an on-site restaurant, gift shop or offers room service, food and product liability can be a considerable concern. The potential for food poisoning, contamination, injury, spoilage and allergic reactions is ever present, making continued guest safety a challenge. In the event that one of your guests becomes ill due to your food, or accidently ingests a foreign object found in one of your menu items or vending machines, your hotel could face legal ramifications and suffer irreversible reputational damage. What’s more, hotel owners must account for the potential danger of gift shop items.
Lawsuits related to liquor liability are filed each day, and it’s increasingly common for victims and their families to file suits against restaurants for their role in serving a customer who is then involved in an alcohol-related accident. Making matters worse, all it takes is a single liquor liability claim to put your entire business at risk. Liquor liability exposures for hotel owners can stem from selling liquor to underage individuals, overserving patrons and non-compliance with applicable legislation.
Continuity is critical in business, and there are few things more important than continuous revenue and cash flow, particularly for small to medium-sized organizations. In fact, just one brief business interruption can be incredibly costly for an organization, often leading to serious reputational damages or long-term closures. Common interruptions for hotels can include natural disasters, fires, leaks, cybersecurity events and vandalism.
The hotel industry is a common target for cybercriminals, as these businesses often store sensitive customer data (e.g., names, addresses and credit card information). In addition, employees who are improperly trained on computer and data safety could put your organization at risk for ransomware, viruses, phishing scams and malware. Compounding your exposures, many hotels offer guest Wi-Fi that, if improperly secured, can put you and your guests at risk of an attack.
Depending on the services your hotel offers, employees may be required to operate a vehicle on behalf of your business, creating automobile exposures in the process. While important for daily operations, the improper use of a vehicle can lead to potential accidents and major insurance claims. What’s more, if you allow employees to use their own vehicles for work, standard commercial auto policies are often not enough. Additionally, providing valet parking can also create unforeseen challenges should a customer’s vehicle get damaged.
Any time one of your employees is injured on the job, your business could be subjected to expensive workers’ compensation claims. Common sources of on-the-job accidents for hotel operations include slips, trips, falls, musculoskeletal injuries caused by repetitive tasks, sprains and strains. Normal, everyday tasks related to cleaning rooms and carrying luggage for guests can lead to accidents and, in turn, increased costs for your business.
Call your Agent, Tucker Harman, today!
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