Hotel Insurance

Most hotels and motels need commercial property insurance, general liability, business interruption, and workers’ compensation as a foundation. Depending on your operations, you may also need liquor liability, innkeepers liability for guest property, commercial auto for shuttles, garagekeepers for valet parking, equipment breakdown, cyber liability, employment practices liability, crime coverage, and a commercial umbrella.

Smaller properties can often combine core coverages in a business owners policy or hospitality package policy.

Have a question about your own property? Contact Ace Insurance Consultants for a free coverage review.

It varies widely based on the number of rooms, building age and construction, location, amenities like pools and bars, payroll, claims history, and the coverage limits you choose. A small motel may pay a few thousand dollars a year, while a full-service hotel with a restaurant and bar can pay far more.

The best way to know is to have an independent agent quote your property with several hospitality carriers.

Have a question about your own property? Contact Ace Insurance Consultants for a free coverage review.

In most cases, yes. Tennessee generally requires employers with five or more employees, including part-time workers, to carry workers’ compensation insurance. Most hotels and motels meet that threshold.

Workers’ comp pays medical bills and part of lost wages for employees injured on the job, and it generally protects the business from employee lawsuits over workplace injuries.

Have a question about your own property? Contact Ace Insurance Consultants for a free coverage review.

Generally, yes. General liability covers claims that your business caused bodily injury or property damage to someone else, such as a guest slipping in the lobby or tripping in the parking lot, including legal defense costs.

Injuries tied to serving alcohol are usually excluded and need liquor liability coverage, and injuries to your own employees fall under workers’ compensation.

Have a question about your own property? Contact Ace Insurance Consultants for a free coverage review.

Innkeepers liability covers damage to or loss of guests’ personal property while it’s in your care, such as luggage, items stored in your safe, or belongings stolen from a guest room. Standard general liability policies usually don’t cover property in your care, custody, or control.

Tennessee law can limit a hotel’s liability for guest valuables when the hotel provides a safe and posts the required notice, so make sure your posted policies and coverage work together.

Have a question about your own property? Contact Ace Insurance Consultants for a free coverage review.

Yes. If you sell or serve alcohol in a bar, restaurant, lounge, or at events, liquor liability covers claims that arise from serving someone who then injures themselves or others. General liability policies typically exclude these claims for businesses that sell alcohol.

Even complimentary drinks at a happy hour can create exposure, so ask your agent how your coverage applies.

Have a question about your own property? Contact Ace Insurance Consultants for a free coverage review.

Business interruption, also called business income coverage, can replace lost net income and help pay continuing expenses like payroll, loan payments, and taxes when a covered loss such as a fire or storm forces you to close rooms. Extra expense coverage helps pay the added cost of reopening faster.

Make sure your coverage period is long enough for a realistic rebuild, which can take a year or more for a hotel.

Have a question about your own property? Contact Ace Insurance Consultants for a free coverage review.

Usually not. Standard commercial property policies exclude flood, so you need a separate flood policy through the National Flood Insurance Program or a private flood insurer.

Hotels near rivers, creeks, and low areas, including much of East Tennessee, should consider flood coverage even if they aren’t in a mapped high-risk zone.

Have a question about your own property? Contact Ace Insurance Consultants for a free coverage review.

Injuries at pools, hot tubs, and fitness centers are generally covered under general liability, but carriers look closely at these amenities and may require specific safety measures, such as self-closing gates, posted rules, depth markings, compliant drain covers, and chemical logs.

Pools can lead to serious claims, so a commercial umbrella is worth considering if you have one.

Have a question about your own property? Contact Ace Insurance Consultants for a free coverage review.

Most hotels should strongly consider it. Hotels store guest names, addresses, and payment card information, which makes them targets for data breaches and ransomware. Cyber liability insurance can pay for breach response, guest notification, forensic investigations, lost income when systems go down, and lawsuits.

General liability and property policies typically exclude or severely limit cyber losses.

Have a question about your own property? Contact Ace Insurance Consultants for a free coverage review.

If your business owns vehicles, such as an airport or attraction shuttle or a maintenance truck, you need commercial auto insurance. If employees run errands in their own cars, hired and non-owned auto liability protects the business if they cause an accident.

If you offer valet parking, ask about garagekeepers coverage for damage to guests’ vehicles in your care.

Have a question about your own property? Contact Ace Insurance Consultants for a free coverage review.

Keep detailed maintenance records, invest in fire protection like sprinklers and monitored alarms, keep your roof in good condition, build a written safety program, reduce slip and fall hazards, secure your pool, train staff on responsible alcohol service, require vendors to carry insurance, and consider a higher deductible.

Most importantly, have an independent agent present your property’s improvements to multiple hospitality carriers.

Have a question about your own property? Contact Ace Insurance Consultants for a free coverage review.

Make sure the guest gets help and call 911 for serious injuries. Complete an incident report, photograph the area, collect witness information, and save any security camera footage. Be compassionate, but don’t admit fault or promise to pay bills.

Report the incident to your insurance agent and carrier promptly, even if you aren’t sure a claim will be filed.

Have a question about your own property? Contact Ace Insurance Consultants for a free coverage review.

Get the employee medical care, document what happened, and report the injury to your workers’ comp carrier right away. In Tennessee, the employer generally provides a panel of physicians for the injured worker to choose from. The carrier pays authorized medical treatment and, if the employee can’t work, temporary disability benefits.

Offering light-duty work within the doctor’s restrictions helps the employee recover and keeps claim costs down.

Have a question about your own property? Contact Ace Insurance Consultants for a free coverage review.

It’s a good idea for most hotels. With many hourly employees and high turnover, hotels face claims of wrongful termination, discrimination, harassment, and retaliation. Employment practices liability insurance (EPLI) covers defense costs and settlements for many of these claims.

Some EPLI policies can also include coverage for claims brought by guests, known as third-party coverage.

Have a question about your own property? Contact Ace Insurance Consultants for a free coverage review.

It depends on the policy. Guest injury claims from bed bugs may fall under general liability, but many policies limit or exclude pest-related claims, and the cost of treatment and lost room revenue is often not covered.

A regular professional pest control program, prompt response to guest reports, and good records are your best defense. Ask your agent how your policy treats these claims.

Have a question about your own property? Contact Ace Insurance Consultants for a free coverage review.

Many hotels carry at least $1 million per occurrence and $2 million aggregate in general liability, and add a commercial umbrella of $1 million to $10 million or more on top. Lenders, franchisors, and management agreements often require specific minimum limits.

Properties with pools, bars, shuttles, or large events usually need higher limits.

Have a question about your own property? Contact Ace Insurance Consultants for a free coverage review.

Standard property policies typically exclude mechanical and electrical breakdown. Equipment breakdown coverage pays to repair or replace HVAC systems, boilers, elevators, commercial laundry equipment, kitchen equipment, and electrical systems after a sudden failure, plus the business income you lose while the equipment is down.

Have a question about your own property? Contact Ace Insurance Consultants for a free coverage review.

Yes. Franchise agreements usually require specific coverages and minimum limits, such as general liability, umbrella, liquor liability, and property coverage, and require the franchisor to be named as an additional insured.

Review your franchise agreement with your agent so your program meets every requirement, since gaps can put you in default of the agreement.

Have a question about your own property? Contact Ace Insurance Consultants for a free coverage review.

At least once a year before renewal, and any time you renovate, add amenities like a pool or bar, change your number of rooms, add vehicles, or change your payroll significantly. Building values in particular should be updated regularly so your property limit keeps up with construction costs.

Have a question about your own property? Contact Ace Insurance Consultants for a free coverage review.