Insurance Issues to Consider for Hoteliers: The Need for Specialized Insurance and More

Editor’s note: This is a guest post from Sachin

If you own and operate your own small hotel or other accommodation, there are a number of insurance issues you need to be thinking about. If you become ill and you cannot operate your own business, you will need the support of income protection insurance. You also have other issues to think about, such as if something happens to one of your guests or your staff, and you also need to protect yourself against the case of fire, water damage and other natural disasters.

In this article, we look at some of the main insurance policies a small hotel or hostel owner should be thinking about. If you are not fully covered, you are risking a lot. There are those insurance agencies that specialize in coverage for hotels, hostels and other small owner operated accommodation. They can normally package a comprehensive policy to cover you for most situations. This is generally called ‘hotel insurance’.

– Buildings and Contents. Just like any home-owner, you need to think about your property and the contents of it. Fire and water damage happens more often than most people think. This is especially the case with a hotel.

– Liability. Any commercial operation like hotels and other accommodation will always have to worry a lot about liability. This includes both your clients and your staff.

– Business Interruption. Business interruption insurance is a business specific insurance. This is very important for hotels and other accommodation because if there is an incident, such as fire or water damage, the insurance that covers your buildings and contents, will not help you with the income you are losing. Business interruption insurance is your last line of defense after you have suffered some other setback. This insurance can even cover the death of an owner or some other serious issue. You should consult with your insurance professional carefully on this insurance. It is actually one of the more important insurances you can have.

– Income Protection. As a self-employed person, you still need to think about your own income, and not just that of your hotel. Even though you are self-employed, you are probably on a wage. You might hurt yourself, or have some other illness that will stop you from working. In this type of situation, you do really need to treat yourself like an employee and be covered with your own income protection insurance. You will probably need someone to replace your workload for the period of time you cannot work, and that money will probably come from the income you were earning from your own business.

– Differences with Business Insurance and Hotel Coverage. All of the biggest and best hotels and accommodation chains have specialized hotel insurance. Because there are specific needs in the industry compared with other businesses, we have seen a proliferation in this specialized coverage. For example, fixtures and fittings that are damaged for one reason or another, might not be covered in the same manner with business insurance as they are with hotel insurance. The look of your hotel is very important. If your appearance is not the best, it can severely damage your business.

If you do not have specialized hotel insurance, and you are using a business insurance package, you should consider speaking to hotel insurance specialists. Their coverage is tailored to meet the needs of hotels, which is quite a lot different than with other business operations. There are just so many issues to think about. The loss of a guest’s items could be very costly, for example.

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