Hotel business insurance protects the trading operations of a hotel, the liability, income, people and management exposures that come with running a hospitality business, as distinct from insuring the building alone. Where buildings cover protects the structure, hotel business insurance protects the enterprise running within it. It responds to the claims, losses and disruptions that arise from trading, serving guests, employing staff, handling money and relying on systems.
What This Cover Includes
This cover brings together the operational covers a hotel needs to keep trading and to respond when something goes wrong. It typically includes liability, business interruption, contents and stock, and a range of management and operational sections, and it sits alongside buildings cover within a full hotel programme; our guide to what business property insurance covers explains how the property sections work. For the complete picture across building and business, see our hotel insurance guide.
Speak to a hotel insurance specialist
Protect the trading side of your hotel. Taurus Risk structures liability, business interruption and management cover around how you operate.
Liability Covers for a Trading Hotel
Liability sits at the heart of the cover because a hotel deals with the public and employs staff every day.
- Public liability, covers claims from guests and visitors for injury or property damage connected to the hotel's activities, across reception, dining, leisure facilities and grounds; see our guide to public liability insurance.
- Employers' liability, a statutory requirement where staff are employed, responding to work-related injury or illness claims and extending to part-time, seasonal and agency workers; see our guide to employers' liability insurance.
- Products liability, often relevant where the hotel serves food and drink, covering claims arising from what is supplied to guests.
Protecting Hotel Income
Business interruption is one of the most important elements of the cover because hotels carry high fixed costs that continue even when trading stops. It covers the income lost when an insured event forces a closure or reduction in trading.
The basis of cover should reflect the hotel's cost structure. A revenue basis may suit operations where most costs continue during a closure, while a gross profit basis may suit others. The indemnity period should be long enough to allow for both reinstating the property and rebuilding occupancy, which can take considerable time after a major incident.
Management, Crime and Cyber Exposures
As hotels are often run through limited companies and handle significant data and cash, several management and financial covers are commonly considered:
- Management liability, typically combines Directors & Officers (D&O) cover for claims against individuals for management decisions, Employment Practices Liability (EPL) for employee claims such as discrimination or unfair dismissal, and Crime cover for losses from employee dishonesty and fraud.
- Cyber, responds to data breaches, ransomware and outages affecting booking and property-management systems, where hotels hold large volumes of guest payment and personal data, and is arranged through our technology and cyber liability cover.
- Legal expenses, covers employment, contract, licensing and tax matters, providing access to representation.
- Fidelity, addresses loss from dishonest acts of employees, often arranged within crime cover.
Operational Covers: Money, Engineering and Fleet
- Money, cash on the premises, in transit and in safes, reflecting reception, bar and restaurant takings.
- Engineering, lifts, boilers, kitchen and leisure plant, including statutory inspection of pressure systems and lifting equipment.
- Fleet, hotel vehicles, courtesy cars and minibuses used for guest transport.
Building Your Hotel Programme
As an independent City of London brokerage, Taurus Risk structures hotel business insurance around how each hotel trades, placing cover with insurers whose appetite suits the operation, and a specialist broker can present the risk effectively. Where the operator is separate from the building owner, we help align the business cover with the owner's buildings programme, as explained in our insurance for hotels guide. To take the next step, see our guide to a hotel insurance quote.
Frequently Asked Questions
What is hotel business insurance?
Hotel business insurance protects the trading side of a hotel, liability, business interruption, contents and stock, and management and operational covers, as distinct from buildings cover, which protects the structure.
What is the difference between hotel business insurance and buildings insurance?
Buildings insurance covers the physical structure of the hotel, while business insurance covers the operations running within it, including liability, lost income, and management and financial exposures.
Does a hotel that leases its premises still need business insurance?
Yes. An operator who leases the building still has substantial trading exposures, liability, business interruption, contents and management risks, which this cover is designed to address.
How is business interruption arranged for a hotel?
Business interruption for a hotel is arranged on a revenue or gross profit basis depending on the cost structure, with an indemnity period long enough to reflect reinstating the property and rebuilding occupancy.
