Hotel & Motel Insurance Insurance — Your Questions Answered
Quick Answer
Common questions about Hotel & Motel Insurance — what it covers, costs, exclusions, and requirements explained by licensed insurance agents.
Comprehensive FAQ, cost guide, and claims examples for hotel and motel insurance — property, liability, liquor, crime, and business income coverage for hotels, motels, and extended-stay properties.
Quick Summary
Hotel and motel insurance covers property, general liability, liquor liability, crime, and business income for hotels, motels, and extended-stay properties. It protects against guest injuries, property damage, food-borne illness, and revenue loss from covered closures.
What does hotel and motel insurance cover?
Hotel and motel insurance is a package of coverages including: (1) Property — building, contents, and equipment at replacement cost; (2) General liability — premises injuries, slip-and-fall, food-borne illness; (3) Liquor liability — for bars, minibars, and catered events; (4) Crime — guest property theft and employee dishonesty; (5) Business income — lost revenue and continuing expenses during a covered closure; (6) Equipment breakdown — HVAC, elevators, laundry; (7) Workers' compensation — required for housekeeping and kitchen staff.
Does hotel insurance cover guest property?
Crime coverage can include theft of guest property from rooms. California's innkeeper liability statute limits hotel exposure for guest property if the hotel maintains a proper safe and posts required notices. Coverage for guest property claims is important for customer service regardless of statutory limits.
What is business income coverage for a hotel?
Business income reimburses lost revenue and continuing expenses when a covered property loss forces rooms out of service. For a hotel, BI is based on actual average daily rate and occupancy. A good BI policy covers the full restoration period including time needed to rebuild and re-market.
How much does hotel insurance cost?
Small to mid-size hotels typically pay $8,000–$40,000 per year. Premiums depend on building replacement cost, number of rooms, food and beverage operations, alcohol service, pool and spa facilities, annual revenue, and prior claims history. A 50-room independent motel might pay $8,000–$15,000/year, while a 150-room hotel with a restaurant and bar could pay $25,000–$50,000/year.
Do franchise hotels need special insurance?
Yes. Hotel franchise agreements (Marriott, Hilton, IHG, etc.) require brand-mandated coverage minimums and specific additional insured endorsements. Franchisees must also maintain business income coverage that meets brand standards and provide certificates of insurance to the franchisor. Casurance works with hospitality specialty markets that understand these requirements.
What is liquor liability for hotels?
Liquor liability covers legal claims when a guest is over-served alcohol and causes injury to a third party. For hotels with bars, room service alcohol, minibar programs, or catered events, this is essential. Standard general liability excludes liquor liability for businesses in the business of selling alcohol — a separate liquor liability policy or endorsement is required.