Tips for Securing the Right Hotel Insurance

As a hotelier, you may want to re-examine your existing management programs and develop some initiatives to reduce the overall cost associated with the many risks of operating a hotel. The following outlines a few tips to help you re-examine your insurance program, its depth of coverage, and related risks.

Finding the right insurance specialist

Most hospitality executives realize that it is essential to find an insurance broker that specializes in their industry, can identify the right insurance coverage to solve most risk issues, and anticipate future complications, thus allowing owners to concentrate on managing and developing their business.

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Your establishment should have an insurance program that includes essential coverage:

  • General liability

 

  • Property

 

  • Liquor liability

 

  • Employment practices liability

 

  • Workers compensation

 

  • Crime

 

  • Equipment malfunction, and

 

  • Food spoilage

 

General liability coverage is one part of the insurance program that is consistent among different types and sizes of businesses. There is a standard general liability limit: up to $1 million in coverage per accident with a total of $2 million in one year. Your liability limits should reflect the size of your operation and the extent of your properties.

 

Factor in replacement costs for property and contents

 

Carefully evaluate what the replacement costs are for your hotel. Since furnishings can vary significantly from one hotel to another, your broker will recommend an appraisal to determine the amount to replace contents and the property itself in the event of a loss. Be aware that underinsuring can result in a percentage reduction in your claims proceeds after a loss.

 

Business income & food spoilage

 

To avoid disaster, your insurance broker should secure business income and food spoilage coverage very carefully; food-borne illnesses are more important than ever with an increase in publicized incidents. Weather-related power outages can be costly as well when attempting to preserve perishable supplies.

 

Documenting employee theft

 

Aside from securing crime coverage, employers should also have a policy that includes employee theft. A hotel with restaurant that also does cash business should take steps to control the handling of cash, such as implementing a monitored security camera over all register areas. In the event of a loss, it can be quite difficult to adjust a claim if you cannot document exactly how much cash was on hand or identify who was handling the register.

 

Liability for slips & falls

 

Slips and falls should be a major concern since they make up a significant portion of claims. Your broker should work closely with you to monitor such exposures. Inspect the interior of your premises on a regular basis for unsafe conditions that could lead to a slip-and-fall loss and maintain a daily log noting what corrective action you took.

 

There are many additional coverages that make up an effective program, including Excess Liability, Excess Property coverage, Cyber Liability, Employment Practices Liability, Workers Compensation, Directors & Officers, and others. Speak to a professional agent, about the many exposures and risks you face to provide the necessary hotel insurance coverage in order to properly protect your business in the event of a claim.

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