Hotels & Motels Insurance

Hotels & Motels Insurance Ontario

What You Need to Know About Hotels & Motels Insurance

While running a hotel can be rewarding, it also requires a lot of work. As a hotel & motel business owner, you specialize in giving your customers enjoyable and comfortable experiences. After all, their contentment, enjoyment, and comfort come first at all times. 

Insurance Coverage Options

Nevertheless, no hospitality business is immune to mishaps, losses, weather-related damages, or third-party lawsuits. That is why having the correct coverage for your hotel or motel is crucial since anything can happen, including equipment breakdown, a fire, or even customer data breaches. With a comprehensive insurance policy, you can customize your insurance to cover all of the essentials for running your business.

Fortunately, finding hotels & motels insurance in Ontario is super easy thanks to our super Insurance Hero team. We always go the extra mile as your neighbourhood insurance specialists to make sure you have the best protection for your business.

What is hotel & motel insurance?

Hotel and motel insurance is a type of commercial insurance that is specifically designed to address the needs of business owners in the hospitality sector. Since every company in the hotel and motel industry is different, so should the coverage be. Even if you are actively managing risk, unplanned events that are beyond your control can still happen and end up costing your company a lot of money. Hotel and motel insurance helps guard against risks associated with the industry, such as losses, injuries, and damages.

What coverages does hotel & motel insurance provide?

Commercial general liability insurance

You could be held liable for a wide range of things, including slip and fall accidents, physical injuries, and more. Your hotel or motel business can be protected against common risks with the aid of commercial general liability insurance against costly claims or legal action.

Commercial property insurance

Your business can be completely destroyed by a fire, water damage, or even a natural disaster. Commercial property insurance protects your company’s assets, including furniture, equipment, fixtures, and building accessories, against insured risks. Examples include:

  • Property damage due to natural disasters, flood, fire, vandalism or theft.
  • Property damage or theft of electronics, equipment, company documents or employees’ personal belongings.
  • Inventory theft by employees.

Additionally, it helps in offsetting the expense of replacing or repairing equipment that has malfunctioned due to external influences.

Business interruption coverage, which guards your company in the event that you are temporarily forced to close it down because of an illness or injury, is an additional option for commercial property insurance that you can add to your policy. It helps in reducing ongoing expenses brought on by lost revenue, such as rent, bills, and employee salaries.

Commercial Crime Insurance

Internal theft occurs more frequently than you may imagine. As such, you are guarded against internal theft, fraud, and even employee dishonesty with commercial crime insurance. It also insures any money that is stolen while it is being transported away from your place of business, such as while heading to make a bank deposit. This coverage cannot be added to your policy unless you have commercial property insurance.

Cyber liability insurance

Undoubtedly, your company accepts payments from customers using debit and credit cards through a point-of-sale system, a website, or another method. Cyber liability protects you from the costs of cybercrime. For example, a data breach that exposes the private and financial information of your clients or if your company is the target of a cyberattack like ransomware or phishing. If hackers gain access to your guests’ information, cyber liability insurance allows you to warn and protect your guests.

Food and Product Liability Insurance

This coverage protects you from claims of bodily harm or property damage brought on by faulty goods sold in your establishment, including any food and drink items. This is necessary for any hotel and motel business that either sell pre-packed food or cooks their own menu in a kitchen. Should a customer become sick with food poisoning due to something your kitchen staff made or a product they bought at your business, they could sue. This is an available add-on to your general liability insurance. It may pay for both your legal defence fees and any third-party medical bills.

What other coverages should property managers consider adding to their insurance policy?

Host liquor liability

This insurance is a necessity if your hospitality business sells alcoholic beverages. In most cases, host liquor liability will protect you in the case of a claim for property damage or personal injury where drinking alcohol is a significant contributing factor. Here’s what may be covered, depending on your particular policy:

  • Legal fees, such as a court-related lawyer, payout, or settlement costs.
  • Damages, in the event that the court determines you are the liable party.

Legal Expense Insurance

If your other insurance policies do not already cover your legal needs in a certain situation, legal expense insurance offers overall legal protection to fill in the gaps. This insurance can pay for the costs of getting legal counsel and hiring a lawyer.

Equipment breakdown

You might want to think about adding equipment breakdown insurance to your policy based on the size of your company. Although your hotel or motel and its contents, including your equipment, are covered by property insurance, this insurance does not cover equipment damage brought on by internal sources, such as mechanical, electrical, air conditioning, refrigerators and freezers, boilers, and computer malfunctions.

Business Umbrella Insurance

In addition to traditional commercial liability insurance, an umbrella policy provides higher liability limits. It could fill in the gaps in circumstances where your commercial general liability insurance coverage doesn’t entirely pay for the costs of an insurance claim. Despite being optional, this kind of insurance can be a wise investment. The amount of umbrella insurance may not be obvious, but you can discuss your alternatives and what umbrella liability coverage might be useful for your company with an insurance advisor.

Commercial Auto Insurance

You need commercial auto insurance if you or your staff use any vehicles for work-related activities because personal auto insurance does not cover vehicles used for employment-related activities. The following is included in commercial auto insurance:

  • Third-party liability
  • Accident benefits
  • Uninsured automobile coverage
  • Direct compensation-property damage

What risks do hotels & motels face?

There are many everyday risks that business owners in the hospitality industry face. Below you will find a list of some of the top risks that hotel and motel owners should be aware of:

  • Slips and falls

Slips, stumbles, and falls frequently happen in the hotel sector, whether they involve guests or staff members. Poor housekeeping, cooking spills, and snow, rain, or even ice tracked indoors are some of the most frequent causes of slips and falls. Hotel owners are expected to ensure that walkways are clear of obstructions, unsafe spots are marked, and any spills or wet spots are cleaned up promptly. Preventing and minimizing accidents before they occur is the best strategy to lower the likelihood of any liability claims.

  • Property damage

Fire damage is the most common cause of loss in the hotel industry. Hotels and motels are at increased risk of fire due to things like faulty electrical wiring, guests smoking even when it is not allowed, or even grease build-up in the kitchen. Luckily, strict building and health code restrictions are upheld by many hotels and motels, using equipment such as sprinkler systems, hard-wired smoke and carbon monoxide detectors, and easy access to fire extinguishers all over the property. 

  • Food safety

Anytime people are served food, there is an opportunity for risk. Risk exposure is prevalent all day long, whether it be through correct handling and storage practices or strict safety compliance standards. For example, perishable goods can spoil due to equipment failure (such as a motor in the refrigerator malfunctioning) or an extended power outage. Food allergies or food poisoning could also make a customer ill. Should it be determined that a hotel’s food has been contaminated, the business may even need to temporarily close. 

  • Liquor liabilities

Any company that sells alcoholic beverages brings a whole new level of risk to its operations. Even with well-trained employees and the best of intentions, a customer might nevertheless get drunk on the premises. The intoxicated customer might hurt themselves or even someone else, or they might behave badly and cause property damage. It i also possible to unintentionally serve consumers who are underage with fake IDs. 

Furthermore, there is always a chance that someone who is drunk decides to operate a vehicle. Upon leaving the hotel, a drunk driver may cause an accident; in this case, the hotel could be held legally liable.

  • Employee theft

Sadly, employee theft is a problem that plagues a lot of businesses. Hotels and motels are no exception. Theft of the employer’s property and embezzlement are both examples of employee theft. To establish that there is zero tolerance for theft and fraud, make sure that everyone is aware of what these offences involve.

  • Data breach

Hotels and restaurants run a considerable risk of a data breach because they both accept credit cards and store customer information online. A data breach could involve an event such as staff taking customer credit card information or hackers breaking into your computers and stealing your customers’ information.

  • Workplace injuries

There are several potential opportunities for staff injuries to happen because of the range of jobs necessary to maintain a hotel/motel and the hotel’s restaurant and other amenities. In this setting, slips and falls happen frequently. For example, the kitchen flooring at restaurants can often be wet and slick, increasing the risk of a slip and fall. Another common injury at work is a back injury due to heavy or improper lifting.

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Several factors, like the size of your company and the number of employees, will affect the kind of hotels and motels insurance you require. Let Insurance Hero help manage your risk and insurance cost by conducting a full commercial insurance policy review to determine what kind of coverage is best for you!

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