What you should know when choosing Hotel Business Insurance

Running a business in the hospitality industry comes with a long list of risks. You are catering to guests and committing to keeping them safe and happy on your premises. Consequently, hotel business insurance from THREE is essential. In fact, securing comprehensive hotel business insurance is the first step toward protecting your brand’s reputation and financial future.

Who needs hotel business insurance?

It isn’t just large chains that require protection. This coverage applies to motels, bed and breakfasts, boutique inns, and resorts. Basically, if you provide overnight lodging and employ staff to maintain the premises, you face significant liability and property risks. Hotel business insurance ensures that these various hospitality businesses can operate with financial security.

As a hotel owner, you have to think about potential disasters for which your business could be held responsible. A guest could slip and fall by the pool, or a customer could have an allergic reaction to an ingredient in a dish at your restaurant. These risks can lead to damaging lawsuits for your hotel business.

How to evaluate your hotel’s insurance needs.

Before your hotel is ready for guests, you must have hotel insurance coverage in place. Keeping in mind the dangers of the industry, here are some things to think about in terms of hotel insurance coverage requirements:

1. Consider the physical location of your hotel. You should ask yourself some of the following questions. Does your business operate out of a building you own, or are you renting a space? Is your business in a location prone to natural disasters like wildfires or earthquakes?

2. Think about any extra amenities you offer. Does your hotel have a swimming pool or a bar on its premises? Do you use company-owned vehicles? The features that make your hotel stand out can also be the ones that hurt your business the most if not protected by hotel insurance.

3. How many employees does your business have? Does the work they do make them prone to injuries? How prepared are you to respond to accidents?

Why hotel insurance is necessary.

It’s reasonable to wonder, “Why do hotels need business insurance?” The answer is that in the hospitality industry, you are responsible for the safety of guests around the clock, leaving little margin for error. A single lawsuit from a pool accident or a kitchen fire could otherwise drain your reserves and force a permanent closure. Hotel insurance acts as a critical safety net, ensuring that an unfortunate incident remains a manageable hurdle rather than a business-ending disaster.

For independent hotel owners, boutique managers, and other stakeholders, hotel business insurance also serves the purposes of protecting their reputation. It assures guests and staff that their safety is paramount while protecting your unique property from the financial impact of incidents. Understanding these core coverages ensures you can recover quickly and maintain the operational continuity your brand relies on.

Here are the types of business insurance you should have for your hotel

Liquor Liability Coverage

A bar or other space that sells or serves alcohol can be an important source of revenue for your business. But it also comes with legal liabilities. Liquor Liability insurance is essential if you serve alcoholic beverages.

Guests who drink excessively can engage in unruly behavior even after they have left your premises. If a patron was “over-served,” leaves your bar, and gets into an accident on his way home, your business may be responsible for medical expenses for anyone affected. In addition, you may find yourself with significant legal fees.

Liability Insurance

Hotels, inns, bed and breakfasts, and motels are exposed to many types of liability. Your business is potentially responsible for bodily injuries sustained by your guests while on your property, as well as any damage to your property itself.

For example, having a swimming pool is attractive to potential visitors, but it may increase the risk of guest injuries and accidents on your premises. If a guest slips on the wet floor surrounding the pool and injures their back, your business can be liable and may have to pay large costs out of pocket if you don’t have adequate coverage. To better prepare for accidents like this in the future, you should consider hotel insurance programs that include liability insurance.

Commercial Property Insurance

Commercial property coverage for hotels aids hotel owners whose property may get damaged in case of disasters and accidents. By protecting the building and what is inside it, this coverage eases the repercussions from property damage, if a fire breaks out and destroys your outdoor patio for example. Property Insurance can help cover the cost of repairs.

Workers’ Compensation insurance

Most hotels have staff of some kind - whether it is concierge, housekeepers, chefs, or pool attendants. While exact laws may vary, most states require you to have Workers’ Compensation - a critical piece of hotel business insurance—if you have employees.

Hotel staff can be prone to a wide variety of injuries. Back strains from cleaning rooms or lifting heavy objects, burns and lacerations in the kitchen, and slip-and-fall accidents are just some of the employee injuries that hotel management deals with regularly. Having Workers’ Comp as part of your hotel business insurance coverage protects your business from having to pay for medical bills for these and other mishaps.

It is crucial to understand that failing to carry Workers’ Compensation insurance when required (which is virtually always) can come with significant consequences, including financial penalties.

Employment Practices Liability Insurance

As in any other industry, hotel workers can experience sexual harassment or discrimination by coworkers. If your business doesn’t have the right tools in place to deal with these complaints, they can result in employee lawsuits. Employment Practices Liability insurance (EPLI) is a type of hotel liability insurance that protects your business from charges of wrongful termination, harassment, and discrimination.

Factors that affect hotel insurance costs.

Insurance premiums vary based on specifics like your building’s age, location, and total replacement value. Providers also evaluate your annual revenue, payroll size, and the presence of high-risk amenities like swimming pools or bars.

For people like operations managers overseeing multiple locations, a purchase decision may be less about cost and more about a streamlined approach to complex liabilities. A comprehensive hotel insurance program ensures that every property meets rigorous industry standards and regulatory compliance, minimizing exposure across the organization. By clearly defining limits and exclusions, a robust policy simplifies decision-making and strengthens the organization’s resilience against widespread operational disruptions.

Determining your hotel insurance costs.

A policy from THREE is an excellent way to get outstanding financial protection. What will your specific hotel insurance cost be? You can find out by getting a hotel insurance quote on our website. Or, if you prefer, our licensed small business advisors are happy to assist you. They will get to know a little bit about your operation and then tell you how the various coverages in our policy can protect you and what you’ll pay.

Online or over the phone, you will find that great insurance doesn’t have to have a high cost. Owners discover that our hotel insurance coverage is an excellent value—especially when you consider the many types of financial catastrophes it can prevent. Financial instability following an incident without adequate coverage can pose a significant threat to the survival of hotels and businesses. Various incidents can lead to financial challenges, including natural disasters, accidents, or unforeseen events that disrupt operations. Without hotel business insurance, these costs can be overwhelming.

Fortunately, your hotel doesn’t have to be one of them. It takes just minutes to get a quote and purchase a policy that can go into effect as quickly as the next day. Imagine how much better you will sleep knowing your hotel insurance policy is in force and your business is shielded from the high cost of liability, property damage, and more.

How to get hotel business insurance.

Securing the right business insurance for hotels is easier than you might think. You simply need to gather basic details about your operations, such as your location, revenue, and employee count, to generate a quote. With THREE, you can get business insurance you can count on quickly online. You’re able to review comprehensive options and bind coverage immediately.

When you learn more about THREE by Berkshire Hathaway, you’ll also discover that we are a trusted name in insurance, we stand behind our customers, and we do all we can to make it easy for them to obtain coverage and prove they have it. For instance, if you’re a customer and need a Certificate of Insurance, we have a streamlined process for getting your COI.

For new hospitality entrepreneurs and investors, securing the right hotel insurance is a critical step in protecting your capital. It addresses the risks inherent in the industry, allowing you to launch with confidence. By protecting your new venture from early financial setbacks, proper coverage lays the groundwork for sustainable future growth.