What are the common types of Insurance Coverage available for hotels or hospitality operations?
Because the hospitality industry is made up of a variety of operations in different locations, the insurance needs of restaurants and hotels will vary considerably.
A hospitality establishment ’ s insurance policies will reflect the unique characteristics of the type of business being operated and the location in which it does business. For example, a restaurant on the United States Gulf Coast may well feel that hurricane insurance makes sense, while the same type of operation in South Dakota would not.
Similarly, the resort that offers overnight camping excursions for families may desire insurance against animal attacks, while the yoghurt store in a shopping mall would be hard-pressed to justify purchasing such a policy.
Insurance companies offer a wide variety of products designed to meet the needs of their customers. Because this is true, hospitality managers must be very careful to make sure that they select the proper insurance coverage for their specific situation. With too much coverage, or with coverage that is not necessary, operational profits are reduced because premium payments are unnecessarily high.
With no insurance or too little insurance of the right type, however, the economic survival of the hospitality operation and its members may be at risk.
Many countries or states have laws requiring businesses to carry certain types of insurance, at specified minimum amounts, in order to conduct business within the state. In addition, when hospitality firms lease space in buildings, the lease agreement may also require them to carry minimum amounts of insurance.
While the specific types and amounts of insurance needed for any given hospitality operation will vary, the following types of insurance coverage are common.