Hotel, Motel & Resort Business Insurance: Cost & Quotes From $11

Making sure that you have the right hospitality insurance coverage can ensure that your hotel has the best protection, but you also want to be sure that you’re getting cheap hotel insurance quotes from trusted companies along the way. The same also applies if you want to cover a motel or resort. 

Much like with B&B or even restaurant and coffee shop which are essentially in different industries, you want to be sure that you know what coverage to purchase to avoid wasting money. 

You also need to know more about the best hotel, resort, and motel insurance companies to do business with, so that you understand what are the perks of buying a resort, motel, or hotel insurance coverage from a particular carrier - and that you are well aware of the average resort, motel, or hotel insurance cost.

Hotel Liability Insurance

Liability insurance protects a hotel from third-party claims. There are many types of liability insurance. And for hotels, the most common liability insurance are:

• General liability insurance

• Public liability insurance

• Umbrella liability insurance

General Liability Insurance for Hotels

Hotel liability insurance is typically offered as general liability insurance, which is one of the most essential hotel insurance coverage.

This type of liability insurance for hospitality business provides protection from third-party personal injury claims and property damage claims. As the policyholder, you can use general liability insurance to pay for defense costs and compensatory amounts to the third party.

Here are some examples so that you understand how hotel general liability insurance works in practice:

• An employee is hauling the baggage of guests using a trolley. While using the trolley, the employee ran over someone’s foot. The person filed a claim and demanded the hotel to pay for his injury. General liability insurance will pay for the amount of compensation demanded

• The sprinkler of a room suddenly went haywire. As a result, the guests inside got wet. What’s worse is that their valuables such as phones and laptops got damaged. General liability insurance will reimburse the value of damaged properties if the concerned party files a claim

General liability doesn't only take care of property damage and personal injury claims. It has add-ons that provide protection against other exposures associated with your hotel business’s interaction with guests and other entities. These add-ons are:

• Advertising injury coverage

• Products and completed operations

Products and completed operations covers personal injuries or property damage caused by an accomplished service. To make it quick, this will compensate past clients who file a claim against your business. Products and completed operations will also cover legal defense if the matter is taken to court.

A guest might accuse your hotel of committing slander, libel, and other forms of reputation harm. It’s also likely for it to face a copyright infringement claim another hotel filed. Advertising injury coverage will help with these things. What it does is cover expenses needed to wrap up slander claims, copyright infringement claims, libel claims, and more.

Public Liability Insurance for Hotels

Public liability insurance is another liability policy available for hotels. Just like general liability insurance, public liability insurance covers personal injury claims and property damage claims from third parties.

But wait, if general liability insurance and public liability insurance is the same, which of these should you consider getting?

General liability insurance is broader than public liability insurance in terms of what’s covered. We discussed the reason earlier - general liability can be added with optional policies so that it provides better protection. If you want comprehensive coverage against third-party exposures, get general liability insurance.

Public liability insurance is what it is - you can’t add products and completed operations coverage or advertising injury coverage to its terms. Nonetheless, we recommend you get this one if you only need basic protection from third-party risks at the most reasonable price.

Hotel Umbrella Liability Insurance

Hotel liability insurance policies have a payout or coverage limit. A limit is the amount of insurance money your hotel can get from a liability insurance policy. For example, if your general liability insurance has a $1 million limit, then you can get insurance money up to this amount.

Liability insurance will only help you settle a claim up to the amount covered by its limit. For example, if a personal injury claim costs $500,000 and your general liability or public liability insurance has a $1 million limit, then you can use any of the two to pay the compensation in full.

However, if the claim is much higher than your liability insurance’s limit, you’ll have to pay the excess for yourself. Here’s an example:

• Client A is suing your company for $3 million due to property damage and personal injuries. Your hotel only has $2 million general liability insurance. If we do the math, your general liability insurance can only pay $2 million of the compensation the client demands, there’s still $1 million you need to pay yourself

Umbrella liability insurance can help you with the above situation. This liability insurance will pay for the “excess” amount your liability insurance policy can’t take care of. So if you still have $1 million left to pay, umbrella liability insurance will pay for such excess on your behalf.

Other Types of Insurance Your Hotel Needs

Your hotel doesn’t only need general liability insurance, public liability insurance, or umbrella liability insurance. Aside from third-party claims, there are other exposures - damage or destruction of tangible business assets, workplace injuries and illnesses, vehicular accidents, and more. For this reason, insurance companies underwriting tailored hotel insurance also offer the following policies aside from liability insurance:

• Commercial property insurance

• Workers compensation insurance

• Commercial auto insurance

Commercial Property Insurance

Running a hotel means that you have a fancy commercial building. Inside are bedrooms furnished with expensive pieces, a kitchen to cook food for guests, and amenities such as a lobby, a swimming pool, casino, and others.

You have a lot of tangible assets to protect against losses when running a hotel. In connection, you’ll get the most comprehensive protection through commercial property insurance.

Commercial property insurance has two basic functions:

• Pay for reconstruction if your hotel gets destroyed by fire or extreme weather

• Pay for building repair if your hotel gets damaged by fire, extreme weather, theft, vandalism, and other covered perils

Additionally, commercial property insurance has stocks and contents coverage, and business equipment and tools coverage.

Your hotel surely has a lot of advanced and basic equipment inside - air conditioners, room service tables, trolleys, and the like. If fire, theft, vandalism, extreme weather, or other covered perils damage or destroy these, trust that business equipment and tools coverage will reimburse your losses.

There are other valuables inside your hotel aside from business equipment and tools - CCTV cameras, computers, POS machines, expensive lighting, stock of food and ingredients in the kitchen, etc. Stocks and contents coverage will reimburse your losses if the objects we mentioned become lost or damaged due to fire, theft, vandalism, and other covered perils.

Is Your Hotel Covered Against Earthquakes and Floods?

Commercial property insurance doesn’t cover your hotel against earthquakes and floods. If you want protection against these perils, get tailored flood insurance and earthquake insurance.

Commercial Auto Insurance

Commercial auto insurance is a coverage for the commercial vehicle your hotel owns whether it be an expensive limousine or economy passenger van. The four types of protection your hotel’s commercial vehicle gets from this insurance are:

• Auto liability coverage

• Physical damage coverage

• Medical payments/personal injury protection

Auto liability coverage will cover costs if your hotel’s commercial vehicle caused an accident and injured third parties or damaged property. This will pay for the medical payments of individuals injured and will reimburse those who had their property damaged. Auto liability coverage will also take care of defense costs, other legal fees, and settlements if someone decides to file a lawsuit.

Medical payments/personal injury protection will cover costs if your commercial vehicle causes an accident or gets involved in an accident and the driver, as well as passengers, incur injuries. Both will pay for the injured driver or passenger’s medical treatment/procedure, hospitalization, and rehab.

Physical damage coverage will take care of the commercial vehicle’s structural integrity. This has two forms:

• Collision physical damage coverage - Pays for parts repair and replacement costs if your hotel’s commercial vehicle caused an accident or got involved in an accident and incurred damage

• Comprehensive physical damage coverage - Pays for parts repair or replacement costs if theft, fire, vandalism, hail, storm, and other covered perils damaged your hotel’s commercial vehicle

Workers Compensation Insurance

Your hotel won’t run without employees. Know that they can get injured. Here are some examples of hotel accident reports from the Occupational Safety and Health Organization :

• Hotel del Colorado - On December 14, 2009, Worker #1, a lodging upkeep laborer, was climbing a metal expansion step that was situated against a palm tree. The tree was near an ice skating arena of the hotel. He expressed that the mischance happened when his foot slipped through the stepping stool rungs. And this caused the ladder's feet to lose footing on the cement brick walkway, permitting the stepping stool to slide down the tree. The employee sustained a broken leg when he reached the ground. Medics were called and the employee was taken to the hospital where 24-hour care was provided

• Hyatt Inn San Francisco - At roughly 9: 30 a.m. on May 12, 2009, Worker #1, an inn room cleaner, was redoing a king-size bed. As he or she bowed over to tuck the right beat corner of the bedding, she felt a numbing pain in her lower right leg. The employee attempted to heal it but fell to the floor. After falling, the employee hit her body on the floor and sustained a broken right femur. Medics were called, and she was transported to the nearest hospital.

If an employee gets injured, you’re responsible to pay for treatment, hospitalization, medication, and lost income compensation. Of course, you want to avoid paying for the costs yourself. Workers compensation insurance makes this possible.

Workers' compensation insurance will pay for the treatment, hospitalization, medication, and lost income compensation of an employee. This will kick in no matter how minor or severe an employee’s work-related injury or disease is.

The amount of lost income compensation an employee receives from workers' compensation insurance is equal to two-thirds of the average weekly wage. Furthermore, this will be provided for three years or more.

Hospitality Indemnity Insurance

Hospitality indemnity insurance is a form of coverage that will protect you even if you’re found to be at fault for what occurred. This kind of hotel business insurance is a little rarer and much more expensive than basic liability coverage, though it only applies to certain industries. 

While we’re sure you could find hospitality indemnity insurance if you searched through the 'Get Quotes' button option, many searchers end up getting it confused with hospital indemnity insurance, which is a completely different sort of coverage that is also known as medical malpractice insurance, which kicks in if a doctor makes a mistake and it results in a patient being injured or even dying. So do not be mistaken, as you are after something else.

However, a form of hospitality indemnity insurance that may apply to hospitality business owners is property indemnity insurance. This protects you from legal defects with the property that you’re purchasing, especially those that would require quite a lot of work to fix up.

Resort Insurance

Compared to hotel business insurance, resort insurance tends to be a little more expensive because of the higher average quality of the accommodations in a resort. The vast majority of resorts tend to have high property values as well as plenty of valuables within their suites. 

Another difference between resort insurance and motel insurance is that resorts tend to offer their guests exclusive activities that may end up putting them in danger. All of this comes together to increase the relative cost of resort insurance, especially when you compare it to hotel insurance coverage.

Most resorts are covered by hospitality business insurance policies, just like hotels, but they are often handled by agents that are qualified to work with resorts. Since resorts tend to be big-ticket customers when it comes to liability insurance, don’t be surprised if you’re dealing with one of the higher-up agents at one of the best motel insurance companies.

Hotel Insurance Cost

Contrary to popular belief, there is no best hotel insurance policy because the exact type and amount of coverage varies from hotel to hotel. In most cases, the cost of insuring a hotel depends on the number of rooms that it has, the number of years in business, revenues, number of employees, and more. 

Other factors will also go into determining how much you can expect to pay for your hospitality insurance, including your hotel’s level of maintenance and whether there’s a history of incidents at your hotel.

The average hotel insurance cost for small hotels is about $84 per month or $1,008 per year for a $1 million general liability insurance policy only. 

Below, we’ve gathered the following average hotel insurance rates from some niche insurers for medium-large hotels. For these numbers, our hotel has a clean history and is a well-maintained building.