Hotel & Motel Insurance
When it comes to hotel and motel insurance, it can be very tricky to get your policy set up correctly. Different businesses will require very different types of cover dependent on whether you own the property or are a lease holding operator.
Not having the right cover for your business setup can result in you being exposed to financial risks that you thought you had covered. In some instances, your hotel insurance costs could be significantly higher than they need to be.
Different Types of Hotel & Motel Insurance Cover
One of the most important things you have to consider before you take out any business insurance for the hotel and motel industry is what type of coverage you actually need.
It’s rather common in the industry for an owner to allow their tenant (who operates the motel) to take out building insurance under the tenant’s entity. In the event of a claim, this can leave both parties badly exposed to financial risk, especially if the policy has not been set up correctly.
Here are the three types of policies depending on the relationship between the owner of the motel and the company that runs it:
Property Owner (Landlord)
- Covers the structural building to avoid catastrophic financial loss from fire, storm, flood, as well as accidental or malicious damage
- Also includes property liability for any claims that arise, to protect the property owner against action & legal fees
- Can also include business interruption due to rent loss, machinery breakdown, and glass
Operator & Leaseholder (Tenant)
- Specifically excludes cover for the physical building, which must be insured by the property owner, but covers any stock and/or contents that the tenant is financially responsible for
- Also includes liability for the operation of the motel and any claims arising from these activities
- Can include business interruption, theft, machinery breakdown, money, and glass
- If the same party owns the building & operates the motel, the insurance program will include cover from each of the examples above, depending on how the company is structured
- Ideally, the legal entity that owns the motel is different from the one that operates it, which maximises the level of cover available, particularly relating to business interruption)
As experienced insurance Advisers, we can help you identify the cover your specific situation requires. This is the first thing we review with all clients and too often have we encountered situations where the existing insurance programs were inadequate & exposed those clients to substantial risk.
Quality Advice You Can Trust
Insurance policies in the accommodation & hospitality industry are complex and can be difficult to understand. As a business owner, you’re better off discussing these matters with experts to take any doubt out of the equation.
It can happen too easily that you arrive in a claims situation only to find out that you don’t actually have all the risks covered. Or you could be paying an inflated premium for cover that legally should not be your responsibility.
It’s always a good idea to check your lease agreement for any legalities that can impact your risk exposure.
At Aspire Insurance Solutions, we have a dedicated team that understands the insurance market and makes it their mission to come up with the best solution for your business.
Whether you own & run a small motel or a chain of hotels across multiple cities, your assigned insurance representative will have the knowledge and experience to make sure you satisfy all motel and hotel insurance requirements.