According to National Fire Protection Association (NFPA), the U.S. fire department responds to about 3,520 structure fires in hotels and motels every year. Besides fire, the hospitality industry faces many more hazards, ranging from generic hazards such as trips and falls to more unique hazards such as liquor liability. If left unchecked, these hazards can lead to huge losses and even business failure. One way to manage health and safety risks in the hotel industry is to carry hospitality insurance coverage. Here is more detailed information on hospitality insurance coverage every hotel and motel needs.
What Is Hospitality Insurance?
This is a collective term that refers to all insurance coverages suitable for motels, hotels, and any other establishment that provides dining, entertainment, and accommodation services. It helps protect hospitality-based businesses from perils such as theft, vandalism, fire, and liability.
Types of Hospitality Insurance Coverage Options
The kinds of risks at hand determine the types of hospitality insurance coverages required. Common hospitality insurance coverage options include:
- Liquor liability –You should have the right liquor liability insurance if you serve alcoholic drinks in your establishment. This policy will provide coverage in case intoxicated patrons get rowdy and injure people or vandalize property.
- Business interruption insurance – This policy keeps your business afloat following severe losses that affect the business’ cash flow.
- Workers’ compensation insurance – Employees in the hospitality industry also face risks such as work-related injuries and illnesses. For example, in 2019 alone, there were 93,800 nonfatal injuries and illnesses among full-service restaurant workers. Workers’ compensation typically covers lost wages, medical expenses, and funeral costs for employees who suffer work-related injuries or illnesses.
- Business property insurance – This policy covers the hotel or motel properties which include, among others, equipment, furniture, and computers, in case of damage from a named peril.
Other important coverage options include cyber liability insurance, commercial auto insurance, and general liability insurance.
Factors Affecting the Cost of Hospitality Insurance
- The size of risk – If you have high-risk properties such as pools on the hotel premises, the insurance company will likely charge you higher premiums on your insurance coverages. Also, serving alcohol at your business premises raises the risk significantly, translating to higher premiums.
- Amount of coverage – The size of coverage you purchase determines how much premiums you will pay monthly. For example, if you have a high coverage limit, your premiums will also likely be high, and vice versa.
- Insurance provider – Insurance companies usually tailor policies to suit each policyholder’s needs. As such, the costs of coverages may vary from one company to another.
- Location – The cost of hospitality insurance also depends on the cost of living, which varies with location.
Hospitality Industry Gas Hazards
Unlike hazards such as slips and falls, gas leaks can cause mass injuries and fatalities. For example, in 2017, a gas leak incident at a hotel in Michigan caused 14 people to be hospitalized due to carbon monoxide poisoning. As a hotel owner, you need to devise ways of protecting your guests and employees from gas hazards. The right hospitality insurance will cover your establishment from financial losses associated with gas leaks. You can also enhance gas safety by installing gas leak detectors, training employees on the safe handling of gas equipment, and indicating signage of harmful gas.
How RMS Insurance Brokerage, LLC Can Help
Because health and safety risks are common in the hotel industry, hotel insurance coverage is vital. Call and speak to our agent at RMS Insurance Brokerage, LLC if you have questions. All of our agents are specially trained to provide you with the most accurate and up-to-date information possible. Contact us today to get started on your customized coverage!