Are you someone who owns a hotel and is looking forward to developing your business in this industry without facing any losses? Then you should definitely go for Hotel insurance that will be an added value for your business to survive in this Industry.
Hotel insurance apart from safeguarding your business, also helps you gain the trust of your guests and safeguard your guests against any miserable circumstances. So the necessity of insurance in the hospitality sector is increasing day by day.
In this article we will see in detail the benefits of Hotel Insurance, and how it helps both the owner of the hotel and the guests who stay there. We will also have a glance through why a hotel needs insurance and the major types of insurance that are mandatory for a hotel.
What is a Hotel Insurance
Hotel Insurance is something that is going to reduce the burden on the hotel owners. What actually is the benefit you get out of a Hotel insurance is that, when damage or accidents occur in the hotel, unfortunately, it is transferred to an insurance company and the company takes care of it. As a result the burden of damages that the owner has to bear reduces. There are different types of insurances that protect the buildings, properties, employees, automobiles and other assets.
Why do you need a Hotel Insurance
The world we live in is fast developing, anything can change or happen in a fraction of second. Always things that we don’t expect for happens. So to avoid getting stuck in such miserable circumstances, a hotel insurance is a must.
If your hotel building catch fire abruptly due to a very minute carelessness and it lands you in a financial loss by destroying the buildings, the hotel insurance that you have taken will come to your rescue. In case any workers or guests get injured in an accident that occurred in your hotel, this insurance will help them. The most notable incidents that stress the need of Insurance in the hospitality industry are
- Theft/cyber offences
- Natural calamities
Theft and cyber crimes have started increasing day by day and have become common these days. It can occur at any places be it a low budget hotel or a very luxurious one. In such cases the cyber crime insurances can play a very crucial role. Cyber crimes may include data being stolen from the systems, or any personal information being stolen or is found misleading. Gadgets or any valuable possession of the guests getting missed or any costly appliances or innovation that belong to the hotel management missing can be included under thefts.
Natural calamities are always unpredictable. It can occur at anytime and for any period of time. Damages can be caused due to heavy storms hitting the place where the hotel is being built. Heavy storms can even cause parts of buildings to collapse and can also cause trouble and inconvenience to the guests who are staying there.
In some instances heavy rains and snowfalls can lead to floods which will also cause disturbances to the guests. There are also circumstances that floods can invade the buildings and so prohibit the guests from staying or using the hotels for a temporary short period of time. These situations can inevitably lead to financial loss of the owner. If at all the owner has an insurance, there are chances that this financial loss could be compensated.
Fires often tend to occur accidentally. Fire out breaks can be due to short circuits that occur in the power supply or it can also be initiated because of the carelessness of the guests. Someone who lights a match stick or lighter in a room can also be the cause for fire in the buildings, so the reasons stand unavoidable in most cases. If you are owning a well developed or well developing hotel business, the envy and jealous eyes of your competitor can also land your hotels in fire. There might be planned attacks on your hotels that you are completely unaware of.
Outrages occurs almost in all places. But it mostly dominates in high standard hotels which provide liquor facilities. Liquor liability is also covered under insurance. Anyone who has consumed alcohol making a problem in the hotel and damaging the hotel property or causing any kind of troubles to the employees of the hotel or other guests staying in the hotel can also be compensated under the insurance policies of the hospitality industry. Not only by alcohol consumptions, outrages can also occur in other instances when the paid guests of the hotel face any sort of inconveniences.
Hotel insurance coverage
Hotel insurance covers everything that can cause a potential loss to the owner. There are different types of hotel insurance that covers various aspects of the hotel management. Any building or part of the building being destroyed due to any outrage that has occurred in the hotel premises or it can be due to any natural calamities like storms, low intensify earthquakes etc.
Hotel insurance can also cover financial losses that are caused due to equipment breakdowns, power shortages etc. Some high rated luxurious hotels have additional facilities like swimming pools, liquor supply, gyms and so on. The employees who work for the hotel are also included in the hotel insurances. Any physical or mental loss to the employees due to incidents occurred in the hotel premises should also be compensated under the insurance policies.
- General liability insurance
- Property insurance
- Liability auto Insurance
- Cyber insurance
- Worker compensation insurance
- Liquor liability insurance
General liability insurance
General liability insurance also known as GLI is a scheme that covers your guests physical injury, property damage etc. It also claims any reputational insecurities that come to you or your guests who are staying in your hotels. General liability insurance can be a bit expensive but it is all worth it. If you don’t have a liability insurance and land up in any of the above mentioned crisis, it will end up you sparing your own money to compensate the losses caused to your guests. General liability insurance is a mandatory to all hotels, whether it is a small hotel or a very luxurious hotel. This insurance is also known as commercial general liability insurance (CGL).
A hotel is generally built in a large landscape for accompanying many guests. Many of the luxurious hotels will have gyms, swimming pools, clubs, parties etc. The hotels might also have valuable assets that are highly costly. This insurance comes into play when there is a breakdown in any appliances owned by the hotel, or any outbreak that leads to damage of the properties being used in the hotel and so on.
This type of insurance provides protection to the properties owned by hotel owner. The infrastructure is what attracts most guests into your hotel and the coverage of this insurance mainly targets this. If any damages occurs to your hotel buildings and you are unable to repair them due to financial crisis, it would also result in less amount of guests coming in, which in turn will affect you financially. So during these instances the insurances you have made comes to your rescue.
Liability auto Insurance
Liability auto insurance comes into play if you own a hotel and have vehicles associated with it. Under this insurance coverage any damage that occurs to the vehicles run by the hotel is included. It can be damages caused to the vehicles due to any accidents or even theft of the vehicles. In case of an accident the insurance company will take care of the health related expenses of the persons involved up to a certain limit. Usually this insurance is not required by low budget hotels, but is highly recommended for luxurious high budget hotels to survive in this fast pace growing industry.
Cyber insurance provides coverage for the data theft that occurs online. Mostly hackers tend to get the personal data of the guests staying in reputed hotels. Personal credentials that are often hacked involve credit and debit card numbers, account number, driver’s license numbers, social security numbers and so on.
Cyber insurance sometimes comes as a part of other policies that have been already purchased by the hotel management or at times it needs to be purchased separately. So we must always keep in mind that we living in a world where technology is growing drastically and so cyber threats are also increasing synonymously. Information thefts have become more common and easier compared to theft of assets. Not only the hotel industry, with regard to any industry cyber insurance is a must.
Worker compensation insurance
Workers compensation insurance helps the owner gain the trust of the workers. It provides medical wages for any health issues that has occurred due to working in the hotel. Any physical injury that has occurred to an employee because of the guests also comes under worker compensation insurance.
In case if an employee unfortunately slips to death in any miserable incidents or accidents that the hotel management is responsible of, then the family members of the employee who worked in the hotel will be benefited. Like any other insurance coverage, workers compensation insurance also has certain limitations.
Liquor liability Insurance
This insurance is highly recommended in hotels which sell or supply its guests with alcohols. The coverage includes any physical harm to the persons or any property damage caused because of the act of selling alcohol in the hotel.
Liquor liability insurances compensates the losses that is caused the property of a person because of the act of consumption of alcohol by another person. It is mostly included in the general liability insurance also known as GLI. If in case your insurance provided doesn’t offer you this insurance along with GLI, then you will have to take this insurance coverage separately. Hotels that don’t sell alcohol or permit alcohol consumption does not have the need to get liquor liability insurance coverage.
Hotel insurance requirements
For any insurance policy, certain documents like Aadhar card, voting ID, password etc. Insurance industry is also a growing business in today’s world. At all instances many service providers are ready to help you and guide you with the apt insurance policies for your hotel and are also available to provide you with insurance coverage.
Your only job is to reach out to a genuine service provider. It can also be said as a mutual agreement between two parties that benefit both the parties. Small or big certain insurance coverage like general liability insurance is a necessity to all hotels. The requirements of certain insurances like liquor liability, workers compensation depends on the luxuries provided by the hotel.
Hotel insurance cost
The cost of the hotel insurance varies from hotel to hotel. It is unique for each hotel and it depends on the budget at which the hotel is built, the city at which the hotel is located, the facilities that the hotel has, and the rents the guests pays to stay in the hotels.
Approximately it starts from £4.46 per month. There are many agencies which you can reach out to help and plan your hotel insurance as per your budget and convenience. Some insurances that are required in a hotel might be costly and some would be cost effective, but in the end if a inevitable losses occur it will be really worth it and prevent yourself from landing in financial losses.
So, in this post we have seen about the safety of hotel insurance, how a hotel insurance instils safety both to the owner and guests. If you are someone who is running a hotel business and trying to be successful in this hospitality industry, but you don’t own any insurance for your hotels, What are you waiting for, just go and make plans to get your insurances that will help you survive in this industry without skidding into losses.