Insurance Risks Unique To Hotels And Motels

Insurance Risks Unique To Hotels And Motels

Hotels and motels represent particularly significant investments for their respective owners. For example, even with the recent downturn in California property values, many of these properties, be they in San Diego, San Mateo, San Francisco or Sacramento, have retained property values which are often in the millions or tens of millions. Hotels and motels like these demand a great deal of time, money, and attention to maintain, and to ensure ongoing profitability. Given that many of these hotels and motels involve complex networks of people, repair services, food services (in some cases) and staff, the resulting risk exposure is very high. It is absolutely necessary to account for all these risks by obtaining an insurance policy dedicated strictly to protecting the unique requirements of hotels and motels, and the people who own them, particularly with the property values and natural disasters which can be associated with these assets in California.

As “hoteliers and inn keepers”, owners and operators strive to give their customers an enjoyable stay. That said, it can be all too easy to forget about some of the risks attached to the hotel and motel hospitality industry. Hotels and motels receive hundreds or thousands of visitors each year, and this volume of people can leave these types of businesses seriously exposed should an accident occur on the premises.

For example, if a guest was to trip upon leaving their room and become injured, obviously the hotel or motel could be held liable for significant damages. However, some owners fail to acknowledge the real risk of floods, forest fire or other disaster endemic to California that can result in prolonged loss of use. This is in many ways unique to California hotels and motels, or at a minimum exacerbated by the possible extent of the business interruption and higher cost of doing business in California. Policies available for hotels or motels include employers’ liability insurance, business interruption insurance, money coverage, glass coverage and loss of alcohol license. These coverage’s can be especially important considering the property values, taxes, natural disasters and expenses facing these costly west coast operations.

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Hotel and Motel Insurance coverage should be customized to meet specific operational needs, including:

Natural disasters

Machinery and equipment failure (boilers, cooling units, etc.)

General liability

Commercial vehicle liability

Liquor liability

Restaurant related coverage

Workers compensation

Pollution coverage

Obviously California based hotels and motels should be more concerned with natural disasters, fire, pollution and flood for example, than many other areas of the country. This is also compounded by high property valuations, thus it is particularly important to maintain a more comprehensive policy perspective when reviewing coverage with an insurance broker.