If you’re in the hospitality sector, you’re in the business of making guests feel right at home — meaning safe and secure. And while no hotel, home, or place of business is immune to unfortunate incidents, the difference between losing a customer and building a lifetime relationship is often a matter of being prepared and responsive when something goes wrong. The first place to start is with your insurance policy. Whether you own a single boutique hotel or manage several properties, understanding the basics of insurance can help ensure your property, your guests, and everything else under your roof is covered.
Protecting Your Property
The hospitality industry is known for its high overhead: rooms, furniture, pools, and more — along with the equipment that heats, cools, and secures it. To cover all of this, start with a commercial package policy can help protect property that is damaged as a result of a storm, fire, or other unfortunate incident. In addition, this policy can include business interruption coverage to help pay expenses and cover lost income if you are unable to operate after a loss. There are also some hospitality-specific property coverages you should consider, such as:
- Hotel guest inconvenience: If you suffer property damage and are unable to honor reservations as a result, this coverage helps take care of guests’ related expenses, such as securing other accommodations and travel to the new location.
- Lost key coverage and lock replacement: Keeping guests safe and secure is paramount. This coverage covers costs to replace keys, rekey or reprogram locks to accept new keys, or install and program new locks if a master key is lost or damaged.
Policies and limits can vary, so talk with your independent insurance agent to make sure you have the right type and amount of property coverage to meet your needs.
Safeguarding Guests’ Belongings
You also need to be sure your coverage extends to guests’ property during their stays. Depending on the circumstances, you could be liable for damage to or theft of their belongings. Here are some additional coverages you might want to include.
- Customers’ autos coverage: This insurance covers related costs if a customer’s vehicle or its contents suffers damage or is lost while left in your care.
- Guests’ property coverage: Your guests rely on you to keep their valuables safe. This insurance can help protect against the loss of or damage to guests’ property that is in your care or stored in your business’s safety deposit box.
The loss of a guest’s property is unfortunate — but not being able to rectify the situation quickly and easily is an inconvenience most travelers won’t soon forgive.
Serving Food and Drink
Whether you operate a restaurant providing a wide array of meals or a simple lounge serving light fare and drinks, having the right insurance coverage is important. Preparing and serving food poses the risk of contamination and illness; serving alcohol poses the risk of intoxicated patrons. Your commercial package policy or general liability policy or can cover some of these risks. For example, many policies include food contamination coverage, which covers costs to clean equipment and replace contaminated goods if the board of health orders you to shut down. However, if you serve beer, wine, or spirits, you will need to add liquor liability coverage. Be sure to find out what coverage limitations and exclusions exist around food and drink so your operation can take full advantage of the additional revenue this service provides.
Protecting Against Other Liabilities
Having five-star reviews is one of the best ways to keep your hotel fully booked, but accidents happen — some of which can tarnish your hard-earned reputation, occupation rates, and finances. How would your hotel fare if it suffered a data breach, infestation, or other incident and faced a lawsuit? Your commercial package or general liability policy can help cover litigation costs and court judgments if you are sued, but you may need additional coverage, such as:
- Cyber coverage: If sensitive information, such as customer credit card numbers, is lost, stolen, or exposed, cyber insurance covers costs to alert affected individuals, manage public relations, and defend you in a lawsuit.
- Commercial auto coverage: If you or your employees drive on the job, you should also consider purchasing commercial auto coverage, which helps protect you if one of your vehicles is damaged or responsible for an accident or injury.
- Umbrella coverage: If a guest suffers a severe injury while on your premises, the financial outcome of a claim or lawsuit could be significant, and much more than what your primary general liability policy covers. Umbrella insurance provides additional coverage, protecting your business in the event of a large loss.
Reducing the Risk of Employee Injuries
Make sure your staff members — from those who manage guest check-ins and prepare meals to those who are part of your housekeeping and maintenance staff — are taken care of. Keep work and storage areas free of clutter and well lit, train employees on proper lifting and loading techniques, and make sure your team is covered by workers compensation (WC) coverage. If injuries happen, an insurer experienced in WC can help you get employees back to work in a safe and timely way — and nothing helps you take care of your guests better than taking care of the staff that makes their stays clean, safe, and pleasant.
Exceeding Guest Expectations
In this age of customer convenience, guest experience can make or break a hotel’s reputation and bottom line. Providing comfort and convenience isn’t always easy — especially when accidents occur — but having the right coverage can go a long way in protecting guest property and hotel equipment, and maintaining the excellent experience necessary to stay competitive. Contact an independent insurance agent to find out more, or learn more about Liberty Mutual’s hospitality coverage.
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