Everything to Know About Hotel Insurance: Top 4 Questions Answered

By: Ben Cavallo, CIC, AAI, CISR

Together with partner Keith Signoriello, Ben Cavallo is the principal and co-owner of C&S Insurance.


For hotel owners and management teams, there’s a lot to think about when it comes to keeping operations running smoothly. Ensuring guest and staff happiness, keeping facilities well maintained, and making sure that systems are operational all contribute to the success of a hotel. But what happens when something goes wrong?

As with any business, there are certain risks associated with operating a hotel — including the potential for damage to hotel and guest property, guest and staff injuries, and theft. These types of incidents can make your hotel susceptible to liabilities and lead to expensive lawsuits that don’t only put a dent in your wallet but tarnish your reputation as well. When it comes to protecting your hotel from these (and other) risks, having a comprehensive insurance policy is key.

If you’re wondering how you can safeguard your hotel, you’re in the right place. Continue reading to learn more about hotel insurance, what it covers, and how it keeps you protected.

What Is Hotel Insurance?

Each hotel is unique, with different properties featuring different amenities, services, and locations. This means that just like the properties they protect, hotel insurance plans differ between policyholders and are typically made up of a customized bundle of different types of business coverages.

Depending on your facilities and the amenities your hotel provides, you may need a policy that covers more than only the risks associated with standard hotel operations. The following are commonly accommodated for in hotel insurance policies:

  • Airport shuttles
  • Bars
  • Conference centers
  • Event spaces
  • Gyms
  • Pools
  • Restaurants
  • Spas

What Does Hotel Insurance Cover?

While specific coverages will always vary between policies, some of the most frequently included in insurance for hotels are:

Coastal Business Property

Mainly carried by hotels with waterfront property or those located within a certain distance from the coastline, coastal business property insurance covers risks that exist as a result of location. These risks typically include hurricanes, windstorms, and erosion.

Commercial Auto

If your hotel manages a fleet of vehicles, then it’s crucial to include commercial auto insurance in your policy. This insurance covers losses that involve the cars, trucks, or vans your hotel uses as part of business operations. Depending on your state, a commercial auto policy may be required in order to drive your vehicles.

Commercial Property

This type of insurance should always be included in your hotel’s policy as it helps with losses that result from physical damage to your property (including buildings and certain items in or around the premises) as a result of a covered event. Covered events will depend on the level of coverage you choose and can include everything from fires to theft.

Commercial Umbrella

For extra peace of mind, consider adding this coverage to your hotel insurance plan. Essentially, commercial umbrella insurance helps take care of claims that extend beyond what your other liability policies cover — protecting you from paying out-of-pocket for any legal costs, medical bills, or settlements that are greater than your policy limits.

Cyber Liability

In today’s digital-first world, more and more transactions are taking place online. As a result, the guest data that’s stored in your hotel’s computer systems presents an attractive opportunity for cyber thieves. Cyber liability insurance helps protect your hotel in the event of a data breach or other type of successful online attack.

Employment Practices Liability

Employment practices liability insurance (EPLI) is designed to cover legal costs and any associated damages that result from lawsuits having to do with several different types of employment-related claims — including, but not limited to, wrongful termination, discrimination, and workplace harassment.

General Liability

In the hotel business, accidents happen all the time. Whether those accidents result in injuries to your guests or damage to their property, you’ll need protection should they decide to take legal action against you. This is where general liability insurance comes in, helping protect your hotel in the event of a third-party claim involving any of these incidents.

Liquor Liability

Do you serve alcohol at your hotel? If the answer is yes, then it’s a good idea to carry liquor liability insurance. If a guest becomes intoxicated at your hotel’s bar or restaurant, you could be responsible for any bodily injury or property damage that they may cause. This type of coverage helps protect your hotel by covering any associated legal expenses, settlements, repairs, or medical bills.

Worker’s Comp

In most states, carrying a worker’s comp policy is required for any business that has employees of any kind. This type of insurance protects workers in the event that they suffer an on-the-job injury or a work-related illness.

How Does Hotel Insurance Protect Against Certain Risks?

With guests checking in and out, long employee rosters, and other factors at play, running a hotel involves assuming a variety of risks. But with a comprehensive insurance policy in place, hotels can rest assured that they won’t be left to fend for themselves when accidents occur. When building your hotel insurance policy, it’s important to account for all possible scenarios — including these events.

  • Employee disputes can lead to wrongful termination, discrimination, or harassment lawsuits. The high costs that come with these proceedings can be mitigated by an employment practices liability policy.
  • Though it’s possible for both guests and employees to sustain injuries on your hotel’s property, each group is covered by a different type of insurance. If a guest suffers bodily injuries during their stay, your general liability insurance will cover most claims. However, if an employee is hurt or gets sick as a result of their working conditions, you’ll be covered by your worker’s comp policy.
  • Fires are a threat to any building, but your hotel may be at a higher risk if you have a restaurant onsite or allow smoking in rooms. Should you suffer losses as a result of a fire, you’ll be covered under certain commercial property insurance policies.
  • Intoxicated guests are a risk to your hotel if you serve alcohol on the premises. Liquor liability insurance can help protect you if guests cause property damage or bodily harm to others while under the influence of alcohol consumed at your hotel’s bar or restaurant.
  • Theft is a concern for both hotels and guests alike. To cover items stolen from your hotel, be sure to add commercial property insurance to your policy. General liability insurance will keep you covered should your guests become victims of theft over the course of their stay.
  • Vandalism, whether perpetrated by guests or other individuals, is typically covered by a hotel’s commercial property insurance.
  • If your hotel offers an airport shuttle service or uses commercial vehicles for any other purposes, then your hotel could be responsible for damages from collisions. Your commercial auto policy (required in many states) will help cover any related costs should an accident occur.

How Can I Protect My Hotel?

The best way to protect your hotel from operational risks is by taking out a comprehensive insurance policy. What types of coverages you’ll need for your property will depend on a number of factors that are unique to your business, such as the location of your hotel and the types of amenities it offers.

If you’re looking for a hotel insurance plan but don’t know where to start, our team of insurance experts can help you find the policy that best fits your needs. Contact us today to discuss your questions and begin the conversation about your options.

Or, for more information about different types of business insurance, download a free copy of our Business Insurance eBook.