This type of business involves a substantial amount of risk, but the right coverage offers protection.
When you’re first starting your new business, the right types of hotel insurance coverage are a critical component of your success.
The right policies make sure you’re financially protected against what could otherwise be catastrophic.
Of course, hotel insurance isn’t the only component of a successful business strategy. You will need other business essentials, too. This likely includes a hotel management system that will provide you with everything you need from the start, and that will also offer you the flexibility you require as you grow.
Look for a system that provides you with solutions such as:
- An automated front desk (including reception, reporting, guest history records, rate management, room management, etc)
- A channel manager for automated online sales
- An online booking engine with website and social media functions
- Website development (with a modern, mobile-friendly design with customer-oriented automation to sell rooms)
- Internet acquisition solutions for online payment organization
With the right management system in place, your next step is hotel insurance policies to keep your investment covered.
The following are some of the most important forms of hotel insurance your business should carry to ensure that you are protected from the risks that affect you most.
1 – A Building and Business Property Policy
This standard coverage protects you against financial losses from damage to the structure itself as well as the business’s contents inside the building. This includes everything from furniture to supplies. Some policies will also extend some coverage to the personal property of guests and employees. Discuss the coverage, limitations and exclusions with your insurance agent.
2 – Commercial General Liability Policy
Though this type of policy is important for virtually any business, it is particularly vital for hotels due to the amount of potential exposure. As guests are living at the hotel for a period of time, the business can be liable for bodily injury they sustain during their stay. This can include anything from slipping and falling on an icy walkway to injury in the event of a fire, for example.
3 – Equipment Breakdown Policy
This type of policy protects against equipment losses due to sudden and unexpected breakdowns or tearing apart of a boiler, furnace, air conditioning, or other machinery. This should not be mistaken for a warranty on that equipment.
4 – Business Income and Extra Expense (BI/EE) Policy
This type of policy covers against income loss due to a covered peril. For instance, if fire is covered by the policy and the hotel becomes unlivable for a period of time due to fire, BI/EE can provide payments to replace the lost income during which normal business operations were not possible.
5 – Workers’ Compensation
Workers’ compensation coverage allows an employee to collect benefits in the event that they sustain an injury while on the job. It provides you as the business owner with additional legal protection against lawsuits filed by that employee.
Other additional forms of optional hotel insurance coverage can include the following:
- Umbrella liability
- Business income from dependent properties
- Utility services-time element
- Ordinance and law
- Signage coverage
- Business auto
- Cyber liability
To know which ones are most important to your business, be sure to discuss them with your insurance agent.