Lodging establishments come is all shapes and sizes, but commonly are either hotels, motels, bed & breakfasts or a collection of cabins. Each have common needs for insurance coverage, and each have some special qualities that need addressing.
Every lodging establishment needs to have coverage on the buildings and contents contained therein. Liability coverage is also a must. A Business Owners Policy (BOP) or Commercial Package Policy (CPP) can be purchased to provide this protection. Coverage can be tailored to properly insure the business. Many lodging establishments have pools, hot tubs and saunas. Some might be beach front property or ski resorts. By adding the right endorsements onto the policy, these varied liability exposures can be picked up, protecting the business.
Workman’s Compensation insurance is required if you have employees in your business. This insurance policy provides medical benefits if an employee is injured on the job. Workman’s Comp is regulated by state law and requirements may vary by state.
A Commercial Auto policy is needed if your establishment owns and offers shuttle service. Some business owners also have a vehicle provided for them by the business and this would be covered by this policy line.
The four policy types listed are the most commonly required lines of insurance. There are several other types of policies that might be needed depending on your establishment. An Umbrella policy provides extra liability coverage over and above your underlying policy. This may be a valuable addition to your insurance package. Inland Marine coverage can be used to cover fine art or other unique possessions of the business. Liquor Liability is required if you have a bar or provide alcohol to guests.
If you have a manager or employee that lives in the hotel, motel or cabin, always remember, the business’ policy does not cover their possessions. It may be possible to endorse it on, but you will likely need to have that employee purchase their own contents policy if they want insurance coverage on their possessions.
The owner of the first bed and breakfast I ever insured wanted me to understand that their business was not like a normal hotel. Their relationship with the guests was different and the owners live on the premises. Often times you can find insurance carriers that have a special program for the bed and breakfast establishments. These will allow you to endorse the policy to cover the owner’s liability and contents onto the policy without having to write a separate contents policy.
Remember to explain all aspects of your business to your insurance agent so he can get you the proper coverage in place. Don’t just look at the bottom line, but make sure you are getting the types of policies that you need.