Insurance for hotels and other accommodation
From accidents and injuries to property damage, there are many potential problems that insurance must cover. Here are the main considerations.
Protecting your property
What is a hosting or hosting business without actual hosting facilities? When you are in the hosting business, your physical property is the most basic part of your business and must be protected from damage. Property insurance is a key part of your insurance package and should cover you against any deliberate damage, such as vandalism, as well as inescapable weather damage.
Remember, even a small home-based lodging operation, such as a bed and breakfast or even a vacation rental property, must still be covered by commercial property insurance. The limits will vary from business to business, but essentially, you want to be covered for the worst-case scenario, so make sure that all property and furniture evaluations are as accurate as possible.
Terms to know: replacement cost or ACV
When insuring your commercial property and the items it contains, you must understand the difference between replacement cost coverage and genuine cash value (ACV) coverage. The first covers the current costs of replacing all lost items, while the second covers the genuine cash value of all lost goods or items. The value of the property depreciates, and the cost of purchasing replacement property or items is inflated; This can create a significant gap between cash value and replacement costs. ACV rarely provides business owners with the coverage they need. Replacement cost coverage may be more beneficial, but you should understand both types of coverage to ensure you get the best coverage for your needs.
Works of art and collectibles
Standard property insurance may be enough to cover basic losses, but when it comes to expensive, hard-to-replace furniture, artwork, and other finishes and furniture, you’ll generally need another layer of protection. Standard coverage generally limits the replacement costs of such items.
It should be noted that while replacement cost coverage is often the most prudent option when it comes to antiques and collectibles, consider covering them for the genuine cash value. These items are difficult to replace, and the cash value of these items often appreciates over time; As a result, replacement coverage can leave you lost, or you can simply get caught up with your insurance company as they decide what constitutes a reasonable replacement. In general, insurers will always try to minimize your claims payments.
Business interruption
What if your hosting business is temporarily unable to provide accommodation? This is not an uncommon event; Bad weather or building wear could lead to long-term maintenance and repairs that leave no room for guests. This loss of income is often not covered by standard property insurance.
By adding business interruption coverage to your insurance package, you will be protected during those periods of time when you cannot continue business as usual. Knowing that you have this protection will give you the peace of mind you need to keep your business as needed while you return to business.
Catastrophic risks
Learn about the landscape and weather around your business, and talk to your insurance provider about the risks automatically covered in your property policy; You may be surprised to find that certain catastrophic risks require additional coverage. Story occurrences such as floods, earthquakes, volcanic eruptions, and mudflow are generally considered catastrophic risks and may require private insurance. It often depends on geography; While some common non-child risks in one part of the country, they can be very physical assets elsewhere.
Liability insurance
While planning some of the more specialized coverages hosting companies need, don’t forget to protect yourself with a good general liability policy! Any number of things can go wrong with guests staying at your lodging, inn, or other lodging business, including injuries, guest property, or stolen illnesses caused by the food you serve. A general liability policy will protect you against claims for property damage, bodily injury, or personal injury to your guests.
Remember that legal and litigation costs can add up to millions of dollars and can seriously affect the ability of your business to succeed.