How Hotel Insurance Can Minimize Risk
Guests, suppliers, and members of the public are in and out of your hotel constantly. Your hotel insurance should have a risk management strategy to help prevent any lawsuits as a result of an accident, injury, or mishap.
You should identify any potential problems your hotel could face and then choose your hotel insurance coverage to minimize risk and keep your rates stable.
You can protect your hotel from risk with the Hospitality Insurance Program (HIP) offered by Western Financial Group. Our HIP Lodging program offers rate stability for Canada’s premier hotels and multi-layered protection to help stop claims before they happen.
Minimize risks with business liability insurance in your hotel insurance package:
Commercial general liability (CGL) insurance
If your hotel were sued, commercial general liability insurance would cover the legal costs to defend the claim in court, as well as costs to cover damages to compensate third parties (guest, supplier, member of the public).
It’s the most important type of insurance you need for your hotel.
What types of risks does commercial general liability insurance cover?
- Injury to another person who is not your employee
- Damage to someone’s property, damage to rented property.
- Medical bills if someone is injured
- Legal and settlement costs of liability lawsuits filed against you.
- Helps over the costs of liability lawsuits related to slander and libel
Cyber liability insurance
If your hotel keeps financial information belonging to your guests, your computer system could be hacked by cyberthieves. Cyber liability insurance will help protect your hotel in the event of a cyber-attack.
Depending on the size of the data breach and the information that was taken, the customers who are affected can hold you liable and sue you for damages.
Cyber-attacks are a fast-growing threat to businesses.
Liquor liability insurance
If your hotel offers alcoholic beverages with room service, in a mini fridge, at a bar, or if your hotel restaurant serves drinks, you will need this type of coverage. Liquor liability insurance protects you against any property damage or injuries caused by an intoxicated guest or customer.
Commercial umbrella insurance
Commercial umbrella insurance addresses liability coverage gaps. It’s used when the primary liability coverage, for example on your commercial general liability insurance, has reached its coverage limit.
The protection that umbrella insurance provides applies only to expenses related to liability such as legal fees, court fees, and legal settlements.
Here’s how Western’s HIP program benefits your hotel
Stop claims before they happen
Western’s risk management team helps you mitigate future risks by identifying and addressing potential threats to your hotel before they happen.
Combats rising rates
Western battles rising insurance rates by helping hotels find potential risks to avoid costly claims. We provide all HIP members with a library of loss prevention tools and resources. Average annual savings are 8-10% for qualified properties across Canada on commercial insurance.
24/7 claims team
We’re here to minimize disruption and get you back on your feet by managing the claims process to get you faster payouts.
Member-owned pool
This fund allows the unique opportunity for premiums to be returned to members when surpluses are built as a result of years with low claims. Under a traditional insurance program, insurers would retain these funds as underwriting profit. One of our key goals as program administrator is to provide resources to support loss prevention, which ultimately aids in providing long-term rate stability or returns of premium.
What other types of coverage are in a hotel insurance package?
Equipment breakdown insurance
If there’s a power outage, air conditioning or heating failure, or appliance breakdown, it can lead to property damage and possible business interruption at your hotel.
Equipment breakdown insurance provides coverage for property damage from the sudden and accidental breakdown of insured equipment that’s not automatically covered by a standard commercial property policy. It covers property damage, business interruption when it’s included in your policy, and spoiled inventory or contents when specified kinds of mechanical, electrical and pressure equipment are damaged, including power surges.
You can insure nearly everything that is mechanical, electrical, and electronic due to breakdown. This includes boilers, air conditioning and refrigeration units, electrical panels, computers and security, and telephone systems.
Commercial crime insurance
Employees, guests, suppliers, and even members of the public have the opportunity to steal from your hotel. If one of your guests is a victim of theft, your hotel could be held responsible for the loss.
Crime insurance helps protect you against losses that are not covered by a standard commercial property policy, such as employee theft, credit, debit or automated teller, counterfeit money, or loss of money at your hotel.
Commercial property insurance
Commercial property insurance can provide financial coverage for physical loss, such as a fire, or damage to your business property and its contents. It also protects the building and provides coverage for your equipment, inventory, furniture, computers, and other electronics.
Business interruption insurance
Business interruption service is essential for your hotel. It supports you when your hotel can’t operate due to a covered loss.
There are a number of losses that could force your business. Some examples are:
- Damage to your equipment from fire or vandalism
- A major reduction in revenue due to a client/supplier facing losses of their own
- A disruption in your supply chain
Business interruption insurance can help with these expenses:
- Payroll
- Rent
- Utilities
- Property taxes
- Alarm monitoring
- Relocation of your business
Commercial auto insurance
Your personal car insurance doesn’t cover your hotel business vehicle(s).
Commercial auto insurance will cover damage to your business vehicle if you or one of your employees gets injured in an accident and your liability to others. It also provides replacement car coverage if you need to rent a temporary car for your hotel/motel business after a covered accident.
Add sewer backup insurance and overland flood insurance to your hotel insurance package
Heavy rainfall, melting snow, and storms can overwhelm drainage systems, leading to sewer backups and overland flooding. If your hotel is located in a flood-prone or an area with aging infrastructure, it could be at risk for sewer backup or overland flooding.
In Canada, most standard commercial property insurance policies do not automatically cover sewer backup and overland flooding. Coverage is often offered as an optional add-on to your main business insurance policy. Are you sure your hotel is covered for these events?
Final thoughts about how hotel insurance minimizes risk
Your hotel insurance can minimize risk by having the right liability coverage and commercial business coverage in place.
More than 900 properties across Canada are insured by Western Financial Group under the HIP program.
Why Western?
100% Canadian
Get the best business insurance in Canada
We’ll help you save
Insuring Canadians for over 100 years!
