Posted on: 14 August 2020

A reminder of the exposures that you could face

As a hotel owner, you will know how hectic your day to day life can be, and whilst you can take as many precautions as possible, there are still a huge amount of risks that you could be exposed to.

Give yourself a refresher of the risks that you could face regularly by reading through this guide.

The risks you could face

Property exposure

Your hotel will likely be home to many valuable items and fittings that could be expensive to replace. Bedding, furniture, wiring and swimming pools can all be susceptible to property damage, such as faulty wiring, plumbing accidents and guest accidents.

When thinking about the property that you own, you should also consider what the repercussions could be for your customers as a result of property damage.

Equipment failures

You may rely on various pieces of machinery keep your business running, such as boilers for heating, water pumps for the swimming pools and ovens for your kitchens.

If these pieces of equipment fail, you may face a business interruption; a period when your business can’t open, which can lead to a loss of income and a loss of reputation.

Crime

Crime can be a tough challenge for hotels, especially cases of theft, where guests, staff and suppliers are always coming and going from your hotel, and that’s even before you’ve considered crime committed by persons outside the hotel.

Cash, equipment and supplies are all items that can be stolen from hotels, leaving you to cover the cost of replacing them, but you could also be held responsible if a guest becomes a victim of theft.

Public liability exposures

As a hotel owner, if you don’t have visitors to your hotel, you don’t have a business. Of course, welcoming guests and visitors to your business brings with it a public liability risk.

Slips and trips are the most common types of accident in the UK, so throwing gym equipment, swimming pools and balconies into the mix can be a recipe for disaster if not properly managed.

Consider public liability insurance which can help to cover you if a guest at your hotel has an accident and makes a claim against you.

Food and product risks

If you have a restaurant or gift shop on your premises, the potential is there for your customers to make a food or product liability claim.

You could be liable for a claim if a customer injures themselves because of a product that you sell at your gift shop.

Whilst gift shops are becoming less common in hotels, restaurants, room service and other food services are becoming increasingly popular as guests look for convenience. Illness or injury caused by food, either from your menu or from a vending machine, can lead to legal issues, as well as reputational damage.

Alcohol related accidents

Alcohol related claims are more common for bars, restaurants and hotels.

Claims usually come from customers who file a claim against a business for serving alcohol to an already drunk customer. By selling alcohol on your premises, you open yourself to risks of selling alcohol to underage customers, overserving customers and non-compliance with alcohol related legislation.

Have regular sessions with your bar staff to remind them of the dangers that your business could face if they don’t comply with alcohol regulations.

Cyber attacks

Hotels have all sorts of data on records, such as names, dates of birth, addresses, email addresses, telephone numbers and bank details, making your business a prime target for cyber criminals. If you have a guest Wi-Fi network, this could also be at risk if not properly secured.

With rapid advancements in technology, cyber-crime is becoming more common, with the UK losing around £190,000 every day to cyber-criminals.

 The Association of British Insurers (ABI) has reported that only 11% of UK businesses take out cyber insurance, which is often not included in a standard business insurance package.

Business interruption

A business interruption is an event that causes a business to cease trading for some time. This could be as a result of a fire, flood, cyber-attack or vandalism.

An interruption to your business can also lead to reputational damage for a business if commitments can’t be honoured, especially for a business like a hotel, where an interruption could leave your customers stranded.

Take a look at business interruption insurance from Premierline to see how you can protect yourself against business interruptions.

Motor vehicle liabilities

If you have a commercial vehicle that you use for your business, there are associated risks.

A standard van insurance policy is unlikely to cover your commercial vehicle in the event of an accident. A commercial vehicle policy would be more appropriate to ensure that you are not left out of pocket in the event of an accident.

If you provide a valet service for your customers, this could create additional risks, as there is the potential to damage a guest’s vehicle, leading to a claim against you.

Hotel insurance with Premierline

As we have outlined, the hotel sector is full of risks that you can hope to mitigate, but accidents can happen at any time, which is why comprehensive insurance is so important.

At Premierline, we are specialists in arranging comprehensive hotel insurance and guesthouse insurance policies. Our insurance specialists will assess your business’ needs to find the insurance cover that offers the best protection for your business. Get in touch to speak to one of our insurance professionals.

Source: Zywave inc - Common Exposures - Hotels

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The information and tools contained in this guide are of a general informational nature and should not be relied upon as being suitable for any specific set of circumstances. We have used reasonable endeavours to ensure the accuracy and completeness of the contents but the information and tools do not constitute professional advice and must not be relied upon as such. To the extent permitted by law, we do not accept responsibility for any loss which may arise from reliance on the information or tools in our Insight Hub.