Protecting Your Hotel From Severe Weather, Fire, and Business Interruption

For a hotel or motel, a single storm, fire, or flood can shut down rooms for weeks or months. East Tennessee properties face tornadoes and severe thunderstorms in spring, ice storms in winter, flash flooding along creeks and rivers, and in the mountains, wildfire risk, as the 2016 fires around Gatlinburg showed. Preparation protects your guests, your building, and your income.

Build an Emergency Plan

• Assign responsibilities. Decide who makes evacuation decisions, who calls 911, who accounts for guests and staff, and who contacts your insurance agent.
• Know your shelter areas. Identify interior hallways and ground-floor rooms away from windows for tornado warnings, and post the information for guests.
• Keep guest lists accessible. Make sure you can print or access the current guest roster if systems go down.
• Practice. Run drills with staff on every shift, including the overnight crew.

Harden Your Property

• Keep your roof in good condition and inspect it after major storms.
• Trim trees that overhang buildings, parking lots, and power lines.
• Secure outdoor furniture, signs, and pool equipment before storms.
• Insulate pipes in unheated areas and keep heat on in vacant rooms during freezes.
• Install water leak sensors and automatic shut-off valves in laundry and mechanical rooms.
• Keep gutters and storm drains clear to prevent water backing up into the building.

Fire Prevention

Fires in hotels often start in kitchens, laundry rooms, and guest rooms. Clean dryer lint traps and exhaust ducts frequently, maintain kitchen hood suppression systems, enforce no-smoking policies, inspect electrical systems, and keep sprinklers, alarms, and extinguishers inspected and in working order. Properties near wooded areas should maintain defensible space around buildings.

Understand Your Property Coverage

Review your property policy before storm season. Know your deductibles, especially any separate wind and hail deductible, and make sure your building limit reflects today’s construction costs. Remember that standard property policies exclude flood and earthquake. Properties near rivers and creeks, which is much of East Tennessee, should consider separate flood coverage.

Why Business Interruption Coverage Matters

When rooms are out of service, revenue stops but many expenses continue. Business income coverage can replace lost net income and help pay continuing expenses like payroll, mortgage payments, and taxes during the restoration period. Extra expense coverage helps pay to reopen faster, such as renting temporary equipment or paying overtime.

• Choose an adequate period of restoration. Rebuilding after a major loss can take far longer than expected.
• Consider extended business income. It continues coverage after you reopen while occupancy recovers.
• Ask about civil authority and utility service coverage. These can apply when authorities block access to your area or a utility outage forces you to close.

Keep Records Off Site

Store copies of your insurance policies, property inventory, photos of your rooms and common areas, and financial records in the cloud. They’ll make any claim faster and easier.

When a Tornado Warning Is Issued

• Use the hotel’s PA system, phones, or staff to alert every occupied room.
• Direct guests to designated interior shelter areas on the lowest floor, away from windows and glass lobbies.
• Have staff carry the current guest list, a flashlight, and a first-aid kit to the shelter area.
• Keep guests sheltered until the warning expires, then check the building for damage and injuries before allowing guests back to rooms.

Ice Storms and Frozen Pipes

Ice storms can knock out power for days, and burst pipes are one of the most common and costly winter hotel claims. Keep heat on throughout the building, including vacant rooms and unheated stairwells, open cabinet doors on exterior walls, and know where every main water shut-off valve is located. A standby generator, or a pre-wired connection for a rental generator, can keep life safety systems and critical equipment running.

Document Your Property Before a Loss

Take a video walk-through of every room type, common area, kitchen, laundry, and mechanical room at least once a year, and store it in the cloud. Keep a current inventory of furniture, fixtures, and equipment with approximate costs. Having this documentation ready makes it far easier to prove what was lost and get the claim paid quickly.

Have Vendors Lined Up in Advance

After a widespread storm, restoration companies, roofers, and electricians are in high demand. Establish relationships with a water and fire restoration company, a roofer, and other key vendors before you need them. Some offer priority response agreements for commercial clients, which can cut days off your restoration time.

Review Before the Next Storm

Contact Ace Insurance Consultants to review your property, flood, and business interruption coverage before storm season, so you know exactly how your hotel insurance program would respond.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.