Comprehensive Insurance for Hotels: Protecting Your Hospitality Business

Michael Otomo
Mar 13
3 min read

Hougom Insurance Agency - Hotels

When running a hotel, whether it’s an independent boutique or part of a well-known franchise, having the right insurance coverage is essential. Hotels face unique risks — from property damage to guest injuries — and a well-structured insurance policy can protect you from costly claims and disruptions.

Essential Coverages for Hotels

Here are the most important coverages every hotel owner should consider:

1. Property Insurance

What It Covers: Buildings, furniture, fixtures, and equipment from perils like fire, storms, theft, and vandalism.
Why It Matters: A hotel’s physical property is its backbone — any damage can lead to significant repair costs and lost income.

2. General Liability Insurance

What It Covers: Claims of bodily injury, property damage, or personal injury from guests and visitors.
Why It Matters: If a guest slips in the lobby or claims their belongings were damaged, this coverage handles legal and medical costs.

3. Business Interruption Insurance

What It Covers: Lost income due to temporary closure after a covered event, like a fire or storm.
Why It Matters: Ensures you can cover payroll, utilities, and other expenses even when your hotel isn’t operating.

4. Workers’ Compensation Insurance

What It Covers: Medical costs and lost wages for employees injured on the job.
Why It Matters: Housekeepers, maintenance workers, and front desk staff face daily risks — this coverage is often mandatory and vital for employee safety.

5. Commercial Auto Insurance

What It Covers: Company-owned vehicles used for guest transport or operational purposes.
Why It Matters: Accidents involving hotel vehicles can lead to significant liability.

6. Cyber Liability Insurance

What It Covers: Data breaches and cyberattacks compromising guest information.
Why It Matters: Hotels handle sensitive personal and payment information, making them prime targets for hackers.

7. Umbrella Liability Insurance

What It Covers: Provides additional liability coverage beyond the limits of your general liability, auto, and workers' compensation policies.
Why It Matters: In the event of a catastrophic claim, umbrella coverage protects your assets by offering higher coverage limits.

8. Liquor Liability Insurance

What It Covers: Claims related to the serving of alcohol, including property damage or injuries caused by intoxicated guests.
Why It Matters: If your hotel serves alcohol at an on-site bar, restaurant, or through catering services, this coverage is essential to mitigate alcohol-related risks.

Franchise Hotel Requirements

Franchise hotels often have specific insurance requirements to meet brand standards. These can include:

Minimum Liability Limits: Ensuring adequate coverage for guest safety.
Property Coverage: Matching franchise-mandated values for building and contents insurance.
Additional Insured: Listing the franchisor on liability policies.
Risk Management Measures: Meeting safety and security protocols required by the franchise agreement.

Risk Mitigation Measures

To keep your premiums manageable and your guests safe, implementing strong risk management practices is crucial:

Sprinkler Systems: Reduces fire damage and demonstrates proactive safety measures.
Security Systems: Video surveillance and key card access deter theft and enhance guest safety.
Fire Extinguishers: Ensures quick response to minor fires and minimizes damage.
UL 300 Systems: Required for commercial kitchens, these fire suppression systems prevent grease fires from spreading.
Regular Inspections: Routine checks of electrical, plumbing, and HVAC systems prevent costly failures.

Why Choose Our Agency

At Hougom Insurance Agency, we specialize in crafting customized insurance solutions for hotels. Whether you operate an independent property or a franchise, we’ll help you meet brand requirements and manage risks efficiently. Our goal is to provide robust protection while helping you control costs.