Hotels deal with many more risks than the common business, which is why they need special coverage plans. Due to a large number of guests and employees that may occupy a lodging facility, it's imperative to carry the right liability coverage. Here's a look at what you need for sufficient hospitality insurance coverage.
The main risks that hotel operators face involve property, guests, employees, and computers. Other risks include theft, vandalism, natural disasters, and litigation. The fact that people spend the night at hotels means the lodging facility is responsible for providing a safe environment. Nonetheless, guests might still confront unforeseen safety issues, which can lead to legal complaints.
Hotel chains typically own properties unless it's a franchise that leases its brand to independent commercial property owners. Commercial property insurance pays for risks such as theft and vandalism. Essentially it covers the building and its contents, including equipment and fixtures.
Most businesses with a substantial number of customers carry general liability to protect themselves against various types of lawsuits that might be filed by customers, employees, competitors, or other entities. If someone gets injured on your commercial property, general liability covers it to the available limits. It protects against lawsuits involving faulty products and services, as well as defamation.
One of the reasons why businesses widely adopt general liability coverage is that an accident can happen anywhere. Even in the safest environment, a person can slip, fall and end up in the hospital. So equipping your business with this coverage can go a long way in avoiding costly lawsuits that could drain your budget.
Most businesses now use computer networks, which can get hacked by cybercriminals, exposing confidential data. In the 2020s, cyber threats are on the rise, so it's wise to take extra precautions when storing personal data. Certain industries such as healthcare and finance must be compliant with their digital technology. Still, any computer system can get hacked, so it's wise to have cyber liability coverage in place for more robust risk management.
Cyber liability insurance covers damage caused to other entities due to a cybersecurity breach. One of the most common types of cyberattacks today is a ransomware attack. The attacker typically freezes up computer systems until the victim pays a ransom in cryptocurrency. Even large corporations with robust state-of-the-art cybersecurity have been stricken with ransomware attacks, so it is best to be protected with adequate cyber liability insurance.
The best approach to hospitality coverage is customization since every hotel is unique by virtue of its location. It's essential to have a conversation with an insurance expert who has a lot of experience serving the hospitality industry and is familiar with your region. Discuss other risks that your operation poses that might not be evident at other hotels.
If your hotel serves alcohol, you may need liquor liability coverage, depending on the state. Ask about other add-on coverage that might not be included in a general commercial business plan, such as flooding or earthquake insurance. Another important question is whether or not an insurer can give you a discount by bundling several different coverage items under one plan.
Hotels are under quite a bit of pressure these days to provide a safe and comfortable environment. Getting the right amount of hospitality insurance coverage will help avoid costly lawsuits while you focus on making improvements for your guests. Contact us at John E. Peaks Insurance Agency to get more information about finding appropriate coverage for your hotel business.