Understanding Hotel Liability
Most products you buy do only one thing. Your car gets you places. Your shoes cover your feet.
Your phone – okay, bad example.
Liability insurance, like your phone, does a lot. It protects you from a whole variety of events that can take place at your hotel.
It can even protect you from something that happens outside of your hotel that threatens your business.
At heart, Hotel Liability insurance protects you from an accident or event that someone blames you for legally.
This could be an accident like falling down the stairs, or a lawsuit against you for slander.
Since you already know about Hotel Insurance in general, it’s time to learn more about Hotel Liability and what it can do.
Let’s dig into this vital coverage and see how your Hotel Liability policy really works.
The Basics of Hotel Liability
Hotel Liability is a General Liability policy, and is divided up into different areas that protect different parts of your business.
These parts come together to form a complete collection that shields you from just about anything that can happen.
Let’s go over each part to better understand how you’re protected.
- Premises Liability is the protection that covers events that happen on your property. Falls on wet floors or stairs, accidents in the parking area, or signs blowing over and landing on guests, all of these are good examples of this coverage.
This is by far the most common liability claim insurance carriers see. And with hotels, your entire business revolves around guests staying, lounging, eating, and sleeping on your premises. The list of things that can happen to spark a claim is a mile long.
Making your hotel as safe as possible goes a long way to reducing the likelihood of a premises liability claim. Cleaning up spills, well trained staff, up-to-code construction, and fences and anti-vortex drain covers for your pool can drastically reduce the chance someone can get hurt – and hold you responsible.
- Next is Personal and Advertising Injury. This coverage is one that no one really expects to need until it saves their bacon. PAI covers you from words, posts, ads, or any other communication that results in a lawsuit against you.
Possible claims are things like insulting a business rival in an advertisement, a slanderous social media post, or any other false statement that another person or business. Lawsuits in this area are typically either slander, libel, copyright infringement, or invasion or privacy.
This protection is more important than ever in our everything-goes-online modern world. Even an off-hand comment by a staff member when posted online can become a major incident. Or if a manager is doing an interview in an industry publication and mentions a piece of insider gossip, leaving your business responsible for the damage to their reputation.
While these two areas of protection cover almost all liability risks for your hotel, there are others that require specific policies. EPLI, Liquor Liability, and Cyber Liability are a few examples of risks not covered by your General Liability policy.
Now you have a better idea of what Hotel Liability insurance covers you from, the risks that are included in your protection. But we still need to go over the how it helps protect you from risk.
Your hotel’s General Liability policy covers you in two primary ways.
- Legal Coverage is protection from lawsuits against your business from any source. Whether it is another business taking you to court or an individual who is trying to get bills covered or compensation, this protects you from the ravages of the court system.
Your liability policy will help with court costs, legal expenses, and damages that may come from the case – all depending on your limits.
For example, if you have $2,000,000 in General Liability protection, and a court finds you responsible for a tragic pool accident, you could meet or exceed that limit depending on lawyer fees and punitive damages.
Most hotels carry at least $5,000,000 in Hotel Liability coverage.
- The other key piece of protection is Medical Expenses coverage. With medical bills climbing higher and higher every year, this coverage has become more important than ever to properly protect your business from a huge claim.
This trend will only continue as the cost of health care is expected to increase.
This coverage helps with the costs of doctor visits, hospitalization, procedures, and further treatment that come as a result of a covered injury. Each injury and each individual are different, so the situation may vary depending on the specific claim.
Many hotels do not have enough liability coverage based on modern healthcare costs. Coverage amounts that were more than enough five years ago may not cut it in today’s world.
If you have had the same coverage for a few years, especially if you’ve been getting the smallest amount possible to save money, it is definitely time for a conversation with an agent.
What Does Hotel Liability Not Cover?
No one coverage can do it all. Your hotel’s General Liability policy is no different.
But what kinds of accidents are specifically excluded in your covered risks? Especially ones that you NEED for your hotel?
- Liquor Liability – Coverage for alcohol related accidents are NOT covered by your basic Hotel Liability policy. That means any accident that results from a person drinking at your hotel will be under a Liquor Liability policy, not your GL.
- EPLI – Employment Practices Liability Insurance covers you from lawsuits FROM employees. If your employee takes you to court for harassment or work violations the resulting claim would NOT be covered by your General Liability policy.
- Cyber Liability – This protects you from cyber attacks, website errors, and employee-caused computer breaches. Your GL will not help if ransomware takes over your hotel’s computer system with all of your client data inside.
There are more areas not covered (your Property being one obvious point, as that is covered under the Property part of your Hotel insurance package).
Is Your Hotel Liability Right For You?
Times change, and so do businesses. If it has been a while since you last had a review of your hotel insurance, there is no better time to start.
While this blog can help with understanding the basic concepts of Hotel Insurance, it can’t replace the wisdom and guidance you get from a conversation with a hotel insurance expert like those we have here at Alliance.
We are proud of our over 20 years of experience in the hotel industry, and have a dedicated team of commercial insurance staff to assist with any need a business like yours can have.
If you’re curious about the programs and packages we can offer you, a short call can make a world of difference.
It might just take ten minutes to give you the best protection you’ve ever had.
So let’s chat about how we can help you thrive – no matter what happens.