Hospitality insurance

Hospitality insurance is often just terribly misunderstood. But the hospitality industry is fraught with danger. It doesn't seem that way on the surface; hotels are dedicated to making travelers as comfortable and convenienced as possible. But an accident is always waiting to happen -- especially when you're always dealing with one night stands and strangers.

Thus, hospitality insurance is all too easy to overlook or just not get right. So, when it comes to this kind of insurance, you need to put first things first.

For instance--you need "replacement cost" insurance, not "market value" insurance. What someone on the open market is willing to pay to acquire your business may not have anything to do with what it would cost you to replace your whole business should you face a tragedy like a total incineration of your hotel. What your hospitality business is valued at while it's up and running typically doesn't compare to what you would have to pay out should you need to pay to have it physically rebuilt from the ground up.

Now, here's another thing--what if you're successful and looking to buy more properties to include in your hospitality business? You had better understand the true cost of insuring a particular property that you think you want to buy. Call it what you will--a bad luck or "haunted" property, or a poor location--there are some properties that just have a bad history full of terribly costly misfortune. Get the facts from an insurer before you sign on the bottom line.

And what about EPLI (Employment Practices Liability Insurance)? If you have a less-than-perfect employee who stalks a guest, just for an example, you could be on the hook--you, the owner, though you personally did nothing wrong. With the shark lawyers out there in this sue-happy society, would you take chances with not having this rider or clause in your insurance? Legal defense fees typically exceed $20,000 and settlements in favor of the guest typically exceed $100,000. Don't be open to that.

Part of this hospitality policy policy should also cover Business Interruption, which we have written about elsewhere. Now, a true expert agent in this field will know all about that, and will also know about EPLI and other things. You don't want some hack and you don't want some generalist insurance agent with respect to your hospitality insurance. You must deal with someone who understands your industry--either because of long experience or because of chosen specialization.

And anyone who is a master of this highly specialized field of insurance will advise you on "markets and volume". Insurance insiders use this as code language. "Markets" references insurance business, and who specializes in what. "Volume" refers to agents with lots of successfully placed policies. You will do far better with those who understand your market and who have plenty of volume in it--underwriters like to see success (that is, to them, a lack of wild risks).

If you feel you might need new or better hospitality insurance for your business, just fill out this form to find highly affordable rates. 

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