What Insurance Small Hotels and Motels Need

What Insurance Small Hotels and Motels Need

June 1, 2023 / 5 mins read

You need to look after your guests and control any risks that would affect their stay at your hotel or motel.

A hotel or motel insurance package, also called hospitality insurance, will help give you protection and peace of mind while your guests are staying with you.

Ask your Western business insurance expert about what type of hospitality insurance package you need for your Victoria hotel or motel business.

The Hospitality Insurance Program

Western Financial Group offers the Hospitality Insurance Program (HIP), which works in partnership with Canadian hospitality associations to provide commercial insurance and employee benefits solutions that are tailored to the unique needs of hotels, motels (as well as bars and pubs).

Speak to your Western business insurance expert about how the HIP program can benefit your small hotel or motel business.

What kind of hotel-motel insurance package do I need?

A hotel-motel insurance package can provide coverage for the different kinds of risks you face, including a slip on a patch of ice, a damaged room, stolen property, or an equipment breakdown.

Discuss the types of coverage you need with your Western business insurance expert to make sure your Victoria hotel or motel has the right hospitality insurance package to protect your investment.

  • Commercial Property Insurance: You’ll need to do a total inventory of all your business property to determine how much commercial property insurance you will need.

Commercial property insurance protects your hotel or motel’s building, property, and contents.

Property you may need to insure:

  • Buildings and other structures
  • Furniture, equipment, supplies
  • Boiler
  • Inventory
  • Computers
  • Documents such as payroll, accounts receivable

Your hotel or motel could have damage due to such things as an equipment failure, plumbing or wiring problem, water damage or fire, or damage caused by an employee or guest.

This type of insurance provides financial support if your property, fixtures, furnishings, and inventory are damaged or lost due to fire, flood, extreme weather, theft, or vandalism.

Commercial property insurance doesn’t cover your hotel or motel against earthquakes and floods. You’ll need to get customized flood insurance and earthquake insurance.

Talk to your Western business insurance expert about how much commercial property insurance you need to protect your Victoria hotel or motel.

1. Commercial General Liability (CGL) Insurance: A guest could slip and fall on ice or get injured on exercise equipment, resulting in a claim against you. Swimming pools and balconies can also be the scene of accidents.

Commercial general liability Insurance protects you against these types of day-to-day risks. It generally covers medical fees and legal expenses, regardless of the outcome of a lawsuit by a client against your hotel or motel operation. CGL also covers issues with the advertising of your business.

It’s important to note that without commercial liability insurance, you would be responsible for paying any liability costs out of your own pocket.

2. Equipment Breakdown Insurance: If there’s a power outage, air conditioning or heating failure, or appliance breakdown, it can lead to property damage and possible business interruption.

Equipment Breakdown Insurance provides coverage for property damage from the sudden and accidental breakdown of insured equipment not automatically covered by a standard commercial property policy. It covers property damage, business interruption when it’s included in your policy, and spoiled inventory or contents when specified kinds of mechanical, electrical and pressure equipment are damaged, including power surges.

You can insure nearly everything for loss that is mechanical, electrical, electronic or under pressure due to breakdown. This includes boilers, air conditioning and refrigeration units, electrical panels, computers and security, and telephone systems.

Go over the specifics of equipment breakdown coverage with your Western business insurance expert.

3. Liquor Liability Insurance: If your small hotel or motel offers alcoholic beverages with room service, at a bar, or if your restaurant serves drinks, you will need this type of coverage. Liquor liability insurance protects you against any property damage or injuries caused by an intoxicated guest or customer.

4. Cyber Insurance: You have your customers’ names, addresses and credit card information. If your computer system is hacked, cybercriminals can sell the information on the dark web. Without cyber insurance, you will have to pay out of your pocket for the cost of restoring your system. You may also be liable for damages to third parties whose information has been stolen and you may have to pay for notification expenses to inform customers affected by a breach.

Ask your Western business insurance expert how cyber insurance can protect your motel or hotel business as part of your hospitality insurance package.

5. Crime Insurance: Employees, guests and vendors all have the opportunity to steal from your hotel or motel. If one of your guests is a victim of theft, you could be held responsible for the loss. This type of insurance helps protect you against certain types of losses that are not covered by a standard commercial property policy, such as: employee theft, credit, debit or automated teller, counterfeit money, or loss of money at your hotel.

6. Business Interruption Insurance: This type of coverage helps support you when your hotel or motel can’t operate due to a covered loss. Bills like repairs, inventory, rent, and payroll keep rolling in even if your business is forced to close.

Some examples of losses that can force your business to shut down:

  • Your business is damaged by fire or vandalism
  • A disruption in your supply change
  • Damage to a neighboring business prevents your business from operating

Business interruption insurance can help with expenses such as payroll, rent, utilities, property taxes and relocation of your business.

It can mean the difference between temporarily closing and permanently closing your business. Get the specifics from your Western business insurance expert to protect your hotel or motel.

7. Commercial Auto Insurance: You need to protect the vehicles that help power your hotel or motel. Your personal car insurance doesn’t cover your business vehicles.

Commercial auto insurance will cover damage to your business vehicle if you or one of your employees gets injured in an accident and your liability to others. It also provides replacement car coverage if you need to rent a temporary car for your business after a covered accident.

If you typically carry business-related equipment in your vehicle, you will need to add an endorsement to your policy to cover it against theft or damage.

8. Umbrella Insurance: Umbrella insurance is extra insurance that provides protection beyond existing limits and coverages of your other policies to protect your hotel or motel. Umbrella insurance can provide coverage for injuries, property damage, certain lawsuits, and personal liability situations.

How much is insurance for a small hotel-motel?

It’s recommended that small hotels and motels have at least $2 million in commercial general liability (CGL) coverage. Discuss with your Western business insurance expert how much CGL coverage you need and other coverages you need.

The size of your hotel or motel, number of employees, and claims history will be factors in how much liability insurance you need.

Not all hotels and motels are the same so it is unlikely that all would pay the same monthly or annually for their coverage. Ask your Western business insurance expert to help you get the right coverage at the right value for you.

Western Insurance has licensed BUSINESS INSURANCE EXPERTS to get your Victoria hotel or motel business the right hospitality insurance package. Our experts are available now to help you navigate the business insurance journey to protect your hotel or motel business.

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