Hotels Insurance – Cost and Types Of Policies

Whenever you budget the expenses of your business, hotels insurance must be high on the list because you can’t always know exactly what is going to happen in the future.

With the protection provided by insurance against accidents and all the other sorts of insurance we will tell you about, you can protect your business and yourself in case something unexpected happens.

Like any business owner, for your hotels enterprise, you must consider how much financial liability you are taking on.

If your hotels business runs without proper insurance, you are taking an enormous chance not just of losing some money but of a final wipe-out.

This is because the laws in every state are very strict in enforcing liability on the owners of businesses for the results of their actions. 

In this article, we are giving very general guidelines for small businesses to outline what the main kinds of insurance that you need are, and where available, a rough guide to how much you can expect to pay.

The question is, can you afford to NOT have insurance for your hotels business?

What this means, for any hotels business owner, is that if some company claims that your work caused them some physical or economic damage, a court can award damages far beyond the total size of your business.

Your hotels business is not protected by laws in the same way as states are, where legislation can place a “cap” on the maximum level of liability.

In some states, like New Jersey, there are specific monetary levels that limit the amount an adjudicator can award in any case against the state.

In a court case, it’s purely the duty of the jury to award whatever amount they deem appropriate, even sometimes giving a claimant more than they have sort.

When you are running your hotels operations, you can’t escape responsibility for the results of your actions.

Even more importantly, unless you have spent in advance the money necessary to have your business running as a corporation, all of that liability belongs to you as an individual.

What does hotels insurance protect you from?

For your hotels business, the most important kinds of insurance are intended to cover the risks to your business from accidents, from unexpected events, and from mistakes.

In addition there are some official kinds of insurance that various states require.

In the next few paragraphs, we will outline the most important points any hotels business owner should remember when negotiating the insurance needed.

The main types of insurance for your hotels businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any hotels business is dealing directly with other people, and that means you always have the danger that some accident can happen to them bodily or else something of theirs can be damaged.

In such a case, they can sue you for compensation.

General liability insurance policy for your hotels business insures you against claims coming from injury to customers or damage to their property.

It protects your hotels business from the claims themselves and in addition to any resulting court costs and legal fees of the lawsuits.

In many cases, it will even help you to qualify for extra business from city and state organizations, where contracts insist on proper liability insurance.

The average level of general liability insurance for your hotels business would be with a boundary of $1 million for a single submission and a total of $2 million for the whole year.

See the table in the costing section below for average prices of general liability insurance for your hotels insurance operations.

Professional liability insurance for your hotels business

In the event where a buyer alleges some negligence, errors, or omissions in how you conducted your hotels business for them, you can quickly be involved in a monetary claim.

Even if the matter against you is ruled in your favor, the cost of defense can be large, and the impact on your reputation can be damaging.

Almost all small hotels business should have enough professional liability insurance to cover an individual claim of $25,000, with annual cover of $50,000.

See the table in the cost of hotels insurance section below for average prices of professional liability insurance for your hotels operations.

Product liability insurance

Whatever goods you sell or advice you give about the goods, you are running a risk that buyers may claim that what they received didn’t meet your description of function, or that your recommendation was basically incorrect.

You need to be aware of the explicit laws of product liability in your own state.

For example, in California, all businesses in the supply chain can be held liable for injuries caused by products claimed to be defective.

To cover yourself against any likely lawsuit, you need Product liability insurance for hotels

Only you can estimate exactly how much insurance you need.

Best advice is to contact experienced insurance agents, brokers or company representatives for support.

Commercial insurance

Commercial vehicle insurance for your hotels business

Be careful! – practically all policies for private vehicle insurance do not cover any occurrence like theft or accidental damage when the vehicle is being used for business purposes.

The best way to make sure that your vehicle is insured for both its own value, and the valuable contents, is by taking out a designated commercial vehicle insurance package.

Commercial van policies cover the value of any vehicle in case of accident, malicious damage, fire, or theft.

Also, in case of any accident, the car itself, the content and any legal bills, medical expenses, and property damage is insured if your truck is involved in a collision.

Most states, other than Virginia and New Hampshire, insist on this type of insurance.

The necessary value of the insurance is calculated on the depreciated value of the vehicle, and your requested level of cover of contents. 

Tools and Equipment insurance

Since your hotels business needs specialized and costly equipment, you know how much it can cost to replace it in case of any damage, loss, or theft.

The equipment may be subject to malicious damage, deliberate fire, theft, other such unforeseen acts.

As well, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can wipe-out your whole business in one stroke.

Unless you can afford to immediately replace such specific gear quickly out of your own pocket, you should have full-level equipment insurance so that you can immediately buy any equipment needed to keep your hotels business running.

It is difficult to advise how much equipment insurance you need – it’s really dependent on how much you have invested in your hotels business’ equipment.

Commercial Property insurance

Any hotels business that owns or rents space in a building must have a commercial property insurance policy.

If you own the property, you probably have a substantial capital investment, along with a big liability if there’s a mortgage.

Any physical building location needs to carry insurance coverage for the value of the premises and contents against unexpected occurrences like fire and storms, and against deliberate damages like theft and vandalism.

If your hotels business works in areas of high risk, like California or North Carolina, supplementary coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Washington, where unlimited cold snaps can cause damage to outer coverings of hotels business premises, there is a need for more extra cover than in warmer climes.

Because the level of cover depends entirely on the value of the property, it’s not possible to say what cover your need, but we have been able in the table in the cost of hotels insurance section below to give some idea of the average prices per million dollars of property insurance for your hotels business.

Temporary insurance by month, week or day for your hotels business

Is your hotels business working part-time or casually, or is the level of business variable?

Using short-term insurance makes perfect sense. Business insurance by the month, day, or week – temporary insurance for hotels – are special policies where you can cover a specific period when you want to be covered.

By only paying for that period of cover, you will save by having lower premiums but still having adequate risk cover.

The key feature of short-term insurance is that you buy the cover for a defined period – a nominated date, or a week or month starting on a specific date, for example for 30 days beginning on the specified date.

When you are expecting periods of better business activity, get the existing cover increased.

Talk to your insurance agent, broker or the company’s representatives to see what options you have.

Business Owners Policy BOP for your hotels business

You have the chance to combine several of the important kinds of small business insurance in one policy that is known as the business owner’s policy – BOP.

A BOP integrates commercial property and public liability insurance by packaging these coverages into one insurance policy, which can save you money.

BOP insurance will protect you if any claims of injury or property damage are made.

It is often the right choice for small and medium-sized hotels businesses, such as yours.

There are a few limits that will determine whether BOP is suitable for your own business.

BOPs cannot cover your professional liability or commercial vehicle cover.

Also, the size of your business will determine whether you are eligible to take out BOP cover.

The usual business that is eligible for a BOP policy must have less than one hundred employees, and maximum five million dollars in annual turnover.

Plus, you must separately take out the required worker’s compensation, health and disability insurance as determined for your state.

Workers Compensation insurance for your hotels business employees

In most states, it is mandatory to have workers compensation insurance when your hotels business has one or more employees.

Workers compensation insurance covers the business against any costs that arise if any hired hand experiences an injury or becomes sick as a result of work.

The benefits cover medical expenses, death benefits, lost wages, and vocational rehabilitation.

Failure to meet a state’s requirements in this regard can leave you as the employer obliged to pay penalties levied by the states.

Some states, such as North Dakota, Ohio, Washington, West Virginia, and Wyoming only allow coverage from the government-run monopoly state funds.

In these states, you cannot obtain your workers compensation obligations from private insurance companies.

Workers compensation rates are computed based on the employee’s pay, and usually come out at around $1.00 per $100 per month.

However, you must consult the relevant authorities in your state.

Average costs of these types of insurance

Although every hotels insurance level is unique, there are enough examples of usual quotes from insurance companies for us to give appropriate guidelines, including what are the cheapest rates offered.

Of course, you should always check with an insurance representative what’s relevant for your business.

The list below is of annual premiums we have researched for the main types of insurance your hotels businesses needs.

Cost of insurance for your hotels operations depends on many different factors.

We have reckoned these figures for small independent hotels businesses.

In larger states like New York, premiums are generally about 20%-30% higher than national averages, whereas in smaller states like Oregon, they usually are about 20%-30% lower.

The location and size and type of your hotels business can have a big effect on the cost of different policies.

You should consult with professional insurance agents and brokers, or insurance company representatives.

As well you can let the internet do the work for you by searching for insurance companies near where your business is located.

Another good source of information is the local Better Business Bureau in your suburb.

FAQ

What is small business insurance for hotels operations?

This is an umbrella term used to describe standard insurance policies designed to protect hotels business owners from risks like bodily injury, property damage, claims of negligence.

Does my hotels business have to have insurance?

Some of the forms of insurance are not mandatory for you to operate your business, but they can protect you from risks in your business operations.

Several other forms are required by state law, such as workers compensation and vehicle insurance.

What does a small hotels business insurance policy cover?

Liability insurance provides insurance against lawsuits or claims filed by a customer for bodily injury, property damage, or negligence.

The exact cover will vary based on your own operations.

See the table in the costing section above for average prices of the recommended policies for hotels insurance.

How much will hotels business insurance cost?

In addition to the size of the business, several other factors, such as location and claims history, are used to determine your policy’s cost.

You should talk to professional insurance agents and brokers, or insurance company representatives.

You can search for more information insurance for hotels, in the search box below, and follow the relevant links.

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