Owning and operating a hotel can be lucrative, but you may have to deal with numerous risks related to lodging, dining, employee mistakes, and amenities. Managing and controlling these risks is essential; otherwise, they can lead to expensive lawsuits and settlements, interrupting your business operations while causing financial losses. However, knowing the common risks in the hospitality industry will help you identify the potential lapses in your risk management and insurance coverages.
Common Hospitality Risk Exposures and Their Solutions
- Safety Hazards
Hospitality businesses are increasingly susceptible to trips, slips, and falls due to wet floors, food spills, electric wires, lifting heavy kitchen equipment, etc. If your customer sustains physical injuries or property damage from such incidents, they may sue you.
No matter how well you prepare your hotels to keep everyone safe, accidents are unavoidable. This is why it is essential to have commercial liability insurance to cover your business against claims related to property damage, physical injury, and advertising injury.
- Hazardous Chemicals
Hotels frequently use soaps, sanitizers, oven cleaners, degreasers, and floor cleaners to keep the surfaces clean and disinfected. However, if they are incorrectly used, chemicals from these products can cause burns, skin irritation, allergies, and respiratory issues to patrons.
However, having commercial liability coverage will keep you covered against such premises liability exposures that cause third-party injuries.
- Property Damage
Hotel owners rely on their buildings and specific equipment to run their business, and property coverage will help protect them against damages caused by fire, flood, vandalism, theft, etc. Commercial property coverage pays for damage or losses to the physical structure of your hotel and its contents, such as tools, kitchen equipment and appliances, inventory, and personal property used for business.
- Food Contamination
If a customer falls ill because of the drinks or food you served, you will be held responsible for the illness and resulting medical expenses. Having product liability coverage will have you covered against such unfortunate incidents.
- Liquor Liability
Any hotels that serve or sell alcohol on their premises are highly susceptible to liabilities caused by over-served or intoxicated patrons, including physical injury, property damage, assault, and non-physical violence. With liquor liability coverage in place, you can serve your customers with peace of mind while getting reimbursements for potential liability issues.
- Special Events
Many hotels host events, such as corporate meetings, festival celebrations, weddings, live music performances, etc. Whether it is a private or public event, there is always a probability of issues. For example, a fight can break out between the participants or attendees of the event, injuring the spectators or damaging their or your business property.
This is where you should think about having event liability coverage to get reimbursements for non-refundable deposits if you have to cancel or postpone the event and cover liabilities resulting from attendees and participants of the event.
With the right coverages in place, you can shrewdly protect your hospitality business from potential risks while mitigating financial losses.
Cover Your Hotels with RMS Insurance
Whether you own a fine-dining restaurant or a single-location hotel, we have you covered at RMS Insurance Brokerage, LLC. Contact our insurance professionals today to get started on your personalized hospitality insurance.