Lodging Places Insurance FAQ

• At the minimum, hotels, motels, Airbnb & inns need general liability insurance.
• If they have employees they will need workers compensation in most states.
• If they have vehicles registered to the business, or use vehicles for the business purposes, they will also need commercial auto.
• There are also other specialty coverages and endorsements that might be needed based on their operations.

All classifications within this category are eligible for coverage in a commercial package policy (CPP). Some may be eligible for coverage in a businessowners policy.

Because business income protection is an important coverage concern, when the risk is eligible for the businessowners policy, it should be the recommended policy due to the automatic 12 months of income protection provided on an actual loss sustained basis

Types Of Lodging Places Package Policies:

• Businessowners Policy (BOP)
• Commercial Package Policy (CPP)

Most lodging facilities have extensive property values that need insurance protection. Some items that, on the surface, appear to be items of personal property are actually considered building, so a property inventory should be prepared and evaluated to properly determine the correct coverage type that applies to each item.

Time element considerations are very important, especially the amount of rental value included in business income.

Fraternity, sorority and older hotel properties should consider ordinance or law coverage as an option.

Motels and hotels located close to large tourist attractions should consider business income from dependent and secondary dependent properties coverage.

Types Of Property Coverages:

• Building
• Business Personal Property
• Personal Property of Others
• Improvements and Betterments

Because lodging places offer numerous services and have a wide range of different types of property needing insurance protection, consideration should be given to the commercial inland marine coverages that may provide the most appropriate coverages.

Types Of Inland Marine Coverages:

• Accounts Receivable Coverage
• Animal Mortality Coverage
• Bailee Customers Coverage
• Broadcasting Tower/Equipment Coverage
• Builders Risk Coverage
• Commercial Articles Floaters
• Contractors' Equipment Coverage
• Difference in Conditions (DIC) Coverage
• Electronic Data Processing Equipment Coverage
• Fine Arts Coverage
• Mobile Agricultural Machinery and Equipment Coverage Form
• Scheduled Property Coverage
• Signs Coverage
• Theatrical Property Coverage
• Transportation Coverage
• Valuable Papers and Records Coverage

Guests' property coverage is a unique crime coverage designed specifically for the lodging industry, but it only protects guests' items, so other types of crime coverage are also needed. The most important of these is employee theft coverage. The increased use of computers in this industry also creates the possibility of losses due to computer and funds transfer fraud.

Types Of Crime Coverages:

• Computer and Funds Transfer Fraud Coverage
• Employee Theft Coverage
• Forgery or Alteration Coverage
• Inside The Premises-Theft of Money and Securities Coverage
• Inside The Premises-Robbery or Safe Burglary of Other Property Coverage
• Money Orders and Counterfeit Money Coverage
• Outside The Premises Coverage

Certain surety bonds are needed so the proper licenses and permits authorizing a lodging facility to open and operate can be issued. In some cases, other bonds may be needed if the lodging facility is contractually obligated to provide lodging accommodations to government entities.

Types Of Surety Coverages:

• Contract-Performance of Service or Supply Bonds
• License and Permit Bonds
• Miscellaneous Surety Bonds

Lodging places operate around the clock every day of the year. This means that customers are on premises at times when they are most susceptible to injury. Because many lodging facilities serve alcohol, liquor liability coverage should be considered in addition to general liability coverage.

Types Of Liability Coverages:

• Commercial General Liability (CGL) Coverage
• Employee Benefits Liability Coverage
• Employment-Related Practices Coverage
• Liquor Liability Coverage
• Owners and Contractors Protective (OCP) Liability Coverage
• Special Events Liability Coverage

Lodging places are a home away from home and therefore must provide many professional services for their clients. It is important to evaluate the professional exposures they may have so that appropriate coverage can be purchased.

Types Of Errors And Omissions (E&O) Coverages:

• Beauticians and Barbers Professional Liability Coverage
• Errors and Omissions - Miscellaneous Coverage
• Law Enforcement Liability Coverage
• Miscellaneous Medical Professional Liability Insurance Coverage

The lodging facility may have no owned vehicles such that the auto exposure is limited to only hired or non-owned autos (as when employees use their vehicles to run errands). Some facilities may need coverage for the buses or vans that transport guests to and from the airport and/or other activities.

The operation and use of any owned vehicles, valet parking and other related auto services should be identified, evaluated and discussed when analyzing the best coverage for the automobile exposures.

Types Of Business Auto Coverages:

• Auto Medical Payments
• Business Auto Coverage
• Collision Coverage
• Comprehensive Coverage
• Garagekeepers Coverage
• Hired & Non-owned Auto Coverage (HNOA)
• Uninsured/Underinsured Motorists Coverage

State statutes require that employers provide coverage for on-the-job injuries sustained by their employees. In most cases this is accomplished with a workers compensation policy. Some lodging places can self-insure if they meet state eligibility criteria and requirements and post the appropriate bond.

Lodging places adjacent to navigable waters may have some employees exposed to operations that make them subject to the Longshore and Harbor Workers' Compensation Act.

Types Of Workers Comp Coverages:

• Excess Workers Compensation Self-Insurance Bonds
• Longshore and Harbor Workers' Compensation Act Coverage
• Stop-Gap or Employers Liability Coverage
• Voluntary Compensation Coverage
• Workers Compensation and Employers Liability Coverage

Whenever a number of persons might be injured or harmed by a single incident, the insured should have additional liability coverage insurance limits. A fire in a lodging facility can cause multiple fatalities. Without the protection of additional limits of insurance through an excess liability policy or umbrella, the facility could face uninsured lawsuits and damages which could result in their bankruptcy.

If the professional cannot be combined with other coverages, a separate excess liability policy over the professional liability policy, including all amendments and exclusions, should be purchased to provide additional limits on that exposure.

Types Of Excess Liability Coverages:

• Excess Liability Coverage
• Umbrella Coverage

The lodging category includes both large and small operations and the hazards and exposures of each vary depending on the activities offered. One or more of the following specialty coverages may be important in filling a gap in coverage in one of these facilities.

Types Of Specialty Coverages:

• Business Legal Expense Coverage
• Cable TV Liability Coverage
• Cyber Liability Coverage
• Data Security Breach Coverage
• Directors and Officers Liability Coverage
• Educators Legal Liability Coverage
• Environmental Impairment Liability Coverage
• Fiduciary Liability (Pension, Welfare and Employee Benefit Funds) Coverage
• Identity Theft Insurance Coverage
• Lead Paint Contamination Coverage
• Medical Personnel Service Agency Liability Coverage
• Recreational Trail Liability Coverage
• Risk Retention Group Liability Coverage
• Solar Energy System Coverage
• Tax Liability Coverage
• Terrorism Insurance Coverage
• Underground Storage Tank (UST) Liability Coverage
• Unmanned Aerial Vehicles (UAV) (Drones)
• Weather Coverage