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Hotel and Hospitality industry

Working in the hospitality industry comes with a variety of perks and advantages. You not only get to know your customers as guests and friends, but you also provide them with a cozy shelter while they are in town. After a stressful day at the office or on the road, they frequently look forward to coming to your hotel so that they can relax after being away from home for so long. When searching for a company that will ensure your hotel or motel, it is important to take into consideration not only the cost of the policy, but also the coverage that the policy provides. The cost of your insurance policy will change depending on factors such as whether or not you have a swimming pool, whether or not the units come equipped with kitchenettes, whether or not the building (or buildings) has elevators, and even how much you charge per night for your accommodations.

Like any other business, the hospitality industry has its share of lawsuits and litigation-related risks. Several real-life claims can be found online, as can numerously examples of those claims. In this article, we’ll look at a few of these claims. Most lawsuits claim some form of negligence. It doesn’t matter how many times a customer sues you if they can show that you were negligent in maintaining your property. Claims for slip and fall injuries are among the most common in the United States. Hotel manager gave birth to her child in one of the hotel’s guests rooms while on duty in NYC in 2011 and filed a $10 million lawsuit against the hotel. What would happen if you were to find yourself in this situation without insurance? The manager’s main grievance was that her boss hurried her out of the building after she gave birth, refused to grant her maternity leave, and then fired her shortly thereafter (6 months give or take). These kinds of situations aren’t unheard of. To protect yourself from such lawsuits, you might ask: “OK, but how much would it cost?”

There are a handful of coverages that are necessary in the hospitality industry. These include Guests’ Property Coverage, Business Crime Insurance, Business Liability Insurance, and Business Property Insurance.

Business Liability Insurance:

There are a few different kinds of legal exposures that are exclusive to the hospitality industry. Hotel insurance typically includes liability coverages for these risks, in addition to the risks that are faced by the owners of any business.

This protects your business from claims such as loss due to bodily injury or property damage from guest who stay on your property.
Liability (If alcohol is served either at restaurant inside the hotel or room service): If your premise serves alcoholic beverages or operate bars than this coverage protects you from losses due to the actions of intoxicated guests who either causes bodily injury to themselves or others or any property damages.
This protects you against any claims made by your former or current employees. Claims that would sue you or your business for an allegedly employment infraction (racism, malpractices, etc.)
This policy provides two options: Commercial Auto or HNO. If your business owns shuttles or transportation vehicles for customers or employees, you should select Commercial Auto. HNO is the option if your business rents or leases non-owned (not owned by your business or affiliation) transportation for customer or employee transportation. This protects you from any potential liabilities incurred during vehicle use.
Only select insurance policies provide this coverage. The following options are available for addition: Docks, Pilings, Gangways, Electrical and Utility hookups, Bulkheads if scheduled, Dock Boxes, Power Pedestals, and a variety of other structural and functional dock and pier components. This liability coverage will cover the following types of damages: Collapse due to the weight of ice, snow, or sleet, wind wave wash – damage caused by wind-driven waves associated with storms, hurricanes, and other similar catastrophes. Due to the vulnerability of such structures, however, flooding is typically not covered by insurance.
The Liability portion of this coverage protects your business from lawsuits filed by customers or affected parties and helps you pay for legal defense and reimbursements on their behalf. This coverage’s Maintenance and Service portion helps you pay for repairs, medical care, legal defense fees, state compliance penalties, property damage, and vandalism. Pool services may include, but are not limited to, cleaning pool filters, vacuuming, cleaning floats, heater repair, chlorine ratio enhancements (depending on the pool), salinity (depending on the pool), underwater lights, underwater speakers and utilities, and underwater hydro-flow machines.
The most prevalent hazards in restaurants include, but are not limited to, fire, smoke, spoilage, cooking accidents, and food poisoning. The liability portion of this coverage will protect you from lawsuits and cover any medical or property damage claims resulting from inadequate maintenance, objects placed in a manner that creates a tripping hazard and resulting fall injury. The breakdown of equipment will include malfunctioning freezers, dishwashers, air conditioners, and other kitchen appliances. Food contamination will cover replacement costs and food poisoning claims due to spoilage – power outages that could lead to defrosting, or other factors that destabilize food (policy dependent – please consult with a Jubilee Expert).
Umbrella gives you excess liability coverage. It provides additional coverage on top of your general liability policy, allowing you to pay for costs that may exceed the policy’s limits. Depending on your policy selection, umbrella coverage limits range from $1 million to $15 million for small to mid-sized businesses and higher for other policies.
This coverage has a limited scope, but it does protect you against claims and damages resulting from the bed bug infestation at your business. Due to the constant flow of travelers, these pesky insects may be left behind unknowingly. Bed bugs spread at an exponential rate, and within a couple of days, you may receive multiple complaints from guests about an infestation in their rooms. Generally speaking, if this situation occurs on your property, you are required to take immediate action, such as isolating all infected rooms and contacting local pest control. This will not only prevent you from earning money for the duration, but it will also cost you a great deal for the pest control service. In addition, you are responsible for handling customer claims if they sue your business for this incident. Examples of such occurrences in 2020 include the following: A customer was awarded a $200,000 settlement as a result of the bed bug bites she suffered during her three-night stay. Another customer received 100 bites while staying in a hotel in the Indianapolis area and was awarded $850,000 in damages. She lodged a complaint with the hotel’s management, but their response did not help resolve the issue. She was able to cover the recovery-related hospital expenses she incurred. Another customer received a $1.5 million settlement for permanent scarring from bed bug bites and mental trauma from having to discard all his personal belongings due to bed bug infestation. This coverage is essential for your business. Regardless of how upscale your maintenance may be, nobody is safe from these bed bug.
A&B coverage extends to any incident involving a fight, expulsion from a bar or restaurant, or self-defense (whether in response to a threat or mistreatment by the bouncers) that results in bodily injury or mental trauma. In most instances, this coverage’s sublimit ranges from $15,000 to $50,000.
It is extremely common for companies to use electronic data on customers and employees for record keeping and billing purposes. This indicates that all of this information is digital and accessible via the internet and servers. Any data accessible via the internet is susceptible to cyberattacks. Cybercrime is becoming increasingly prevalent because it offers the highest pay with the lowest risk for cybercriminals. Some of the costs associated with risks include the following: data recovery fees, legal fees, media mitigation, crisis management, regulatory fines if employee or client data is exposed, defamation in some cases resulting in mental trauma, and a variety of other scenarios depending on the claims. All of the above can result in insolvency or business loss, which is covered by cyber liability insurance.
This addresses your legal obligation as an employer under state workers’ compensation laws. Medical treatment due to injuries and indemnity payments for employees rendered disabled by work-related incidents are covered, as is legal liability coverage. In addition, it covers illness and accidents. For instance, bodily injury caused by a disease contracted during employment, including death, that is caused or exacerbated by working conditions.
OmissionIt is also referred to as professional liability, and it protects your company from lawsuits arising from your negligence in providing proper service or maintenance.
Property coverages hotel and motel insurance policy:

The structural components and the functional bases of each building for your business will have its appropriate coverage. Your property coverage is determined by various factors including but not limited to the materials used in building and roofing. Whether your building is fire resistive, inclusion or exclusion of fire safeguards – sprinklers, self-extinguishers, central or local fire, burglar alarms. Any property damage due to not at fault incidents are covered excluding natural disasters. Natural disasters must be separately added for extra coverage which could include Flood, Earthquakes, or Volcanoes.The following are also covered under this policy: any damage sustained by your business including loss of property or income and extra expense for either 12, 18 or 24 months, guest’s property on premises, accounts receivable, credit card slips, accidental discharge of fire suppression systems or water systems, outdoor signs, canopies, fences, elevators, escalators, landscaping, increased cost of construction due to ordinance of law, or similar aspects.

  • Manager’s Cottage: will carry similar coverage but will most likely won’t heavy coverage due to the square footage of the space provided. This will also include the liability incase the manager sues the business for any negligence.
This protects your assets within your business property including but not limited to your décor, carpeting, furnishings, electronics, food supplies, grooming supplies, garments, chemicals, and alcoholic beverages (some might need addendum due to unusual high cost – per piece value of $10,000 or more). This will also cover your business from lost, stolen, vandalized, or destroyed property.
This will cover any damage to your outdoor advertising signs or billboards. This also includes malfunctions caused by electrical short circuits or damages caused by mechanical failure or wind damage.
This policy would cover the total cost of equipment repair or replacement, as well as the cost of business interruption or cessation, if any of your business’s equipment breaks down and causes an interruption or cessation of operations. Computer equipment, electronics, guest reservations for kitchen equipment, lending of any other necessities to your guests, such as irons, grooming supplies, extra beds, and requests for special equipment, etc.
This may include any historic artwork, fragile objects such as statues, China utensils used in restaurants on your property, indoor or outdoor fountain artworks, collectibles, or jewelry displayed on statues or glass cabins. This policy will cover any damages, vandalism, or theft of these items.
Talk to an insurance agent at Jubilee Insurance about the key coverages highlighted up top that are available through our company and want to know which one might work best for your company.
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