Image of hotel lobby representing insurance for hotels

Gray Secest

Commercial Insurance
Jackson, MS

by Gray Secrest

Most of us have traveled to a place we don’t call home. Some of us spend most of our time on the move and eventually need a place to lay our head after a long day of work or travel. I actually get excited thinking about the warm lights and nostalgic excitement that come from pulling into a hotel late at night when all you can think about is having a soft pillow and decent water pressure. This isn’t a new sentiment. Many before us have experienced this welcome respite from the road.

The first two hotels in history were registered in Japan in the early 700s. Not the 1700s. The 700s. That’s over 1,000 years ago. They are referred to as Ryokans. Tucked deep into the mountains, the Ryokans are situated on hot springs, and for the next millennia, the Ryokans would attract guests from around the world, and they continue to do so today. Whether it’s the sleepy roadside motel or the multi-star modern hotel with complimentary home-baked cookies, the hospitality industry is integral to how we travel the world.

Now on to the super-exciting insurance portion of our program.

We all know how important insurance is, the impact that it can have on one’s life, and the influence that it can have when shaping decision-making. Whether it’s buying a new car, trying to get into a new mortgage, or just planning for the unexpected, insurance protects you from the unknown and safeguards your assets and hard work.
But it’s not always obvious what you’re getting when you purchase an insurance policy aside from a piece of paper that fulfills some legal or financial requirement.

There are a million different types of insurance and just as many directions to go with an article about it, but I’d like to talk about the importance of commercial property insurance with an emphasis on the hospitality industry.

So, why is insurance for hotels important?

Hotels are high-traffic places. Lots of people coming and going in and out of rooms, lobbies, dining areas, and parking lots. That means a high risk of something going wrong. And it usually does sooner or later. Property insurance provides financial protection against damages caused by unexpected events like fire, theft, natural disasters, or accidents. Without it, the cost of repairing or rebuilding your property can be overwhelming. Who will pay when granny accidentally drives her Lincoln Towncar through your front door? You are. You need property insurance. You have to protect your assets.

What about liability insurance?

Your guests and staff are susceptible to plenty of risks, including slips and falls, food poisoning, theft, and who knows what else. That’s just the thing. You never know what could happen! Liability insurance provides hotels crucial protection against lawsuits and financial risks from accidents, injuries, property damage, and general mishaps that can and do happen.
Liability insurance can cover the cost of legal fees, settlements, and damages when things go wrong. Hotels need robust liability insurance policies to safeguard their reputation and financial stability.

Then there’s workers compensation insurance.

It protects any business from financial liabilities in case an employee gets injured or becomes sick while on the job. Business owners can face expensive medical bills, legal fees, and compensation costs without workers comp coverage. Additionally, it helps in retaining valuable employees by building trust and loyalty. Any employee appreciates the ownership looking out for their welfare.

What’s umbrella insurance all about?

I always encourage hotel owners to consider commercial liability umbrella insurance because they face risks that could lead to a whole world of lawsuits. Hotel guests, employees, and vendors may suffer injuries or damage to their property while on hotel premises, and the hotel may be held responsible. Additionally, hotels handle sensitive guest information and often face cyber liability issues. Commercial liability umbrella insurance provides extra coverage beyond a hotel’s standard liability policies, protecting owners from large legal judgments and potentially saving them from financial ruin. It is a crucial safety net for hotels, providing peace of mind for owners and protection for guests.

Let’s talk about EPLI.

Okay, well, what even is EPLI insurance? Employment practices liability insurance (EPLI) is significant for hotels because they often employ a large workforce. It protects hotel owners from lawsuits arising from wrongful termination, workplace harassment, discrimination, or other employment-related issues. Without EPLI, hotels and their ownership can be financially liable for settlements or judgments, which can be very, very expensive. It also helps to safeguard the hotel’s reputation by showing sensitivity to staff welfare and ensuring that the business is lawfully protected from workplace violations.

The goal here is to give you a general understanding of how essential insurance is for hotel owners, staff, and patrons. Insurance is not exciting. We even have an entire marketing campaign on how “Insurance is Awful,” but that’s precisely why I’m here. If you are reading this and have any questions about your business insurance, feel free to reach out to me anytime. I’ll get to work on making sure you have the most comprehensive coverage and protection for your business that you can possibly have.

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