Buying hotel insurance
Running a hotel or guesthouse is a great way to make a living but, like managing any SME, it has its highs, lows, challenges, excitements and rewards. We expect one of those truly exciting moments is when it comes to buying your hotel insurance. No? OK, maybe not…
So it possibly isn’t your favourite task as a hotelier, but we can help you understand exactly what’s involved, why you need insurance and how to choose the best policy for you at a price that doesn’t make you shudder.
The good news is that comparethemarket.com can help you compare different hotel insurance policies based on the details of your own business, so you can get an understanding of prices and different levels of cover.
We do that by getting you to complete some details online. Just select the business section of our site and look under business insurance – there’s a special button just for hotels. We will then take get an expert to call you to discuss your specific business requirements.
First they’ll ask some information about you and where your hotel is. Then they need a few details about the hotel and what sort of cover you want. Then they will talk you through the best quotes and the policies.
Expert advice is important, because no two hotels are the same. Insurers need to understand how many rooms you have, your turnover, number of staff, whether and how often you serve food, the type of building, whether you hold events…That’s because they need work out what kind of risks your hotel might face and calculate your premium based on that. The bigger you are, the more risks there are and so you might be more likely to claim. And those claims might be more expensive.
So let’s look at the kinds of cover you might need as part of your hotel insurance.
Public liability cover
The first is public liability insurance. This kind of insurance means you can claim to pay compensation to anyone on your property who loses property or it gets damaged, or they suffer some kind of injury. An example might be a guest slipping on a wet floor and becoming injured. As a hotel you are ultimately liable because it’s your responsibility to oversee that the property is kept safe and risk-free.
Public Liability limits usually are offered at £2m as standard. But if you have an on-street seating area or hold functions open to non-guests, some local councils might require you to have a higher level of public liability insurance, maybe £5m or £10m. You would need to contact the council for clarification on this.
Employer’s liability insurance
If you have one or more people working for you, you will need Employer’s Liability cover. This is a legal requirement and is usually offered at £5m as standard. Employers’ liability insurance means that you have access to funds if you need to compensate a member of your staff - it might be because they have suffered an injury from a situation that you, as their employer, are liable for.
Protecting the hotel building
You will probably also need buildings insurance for the hotel. Any hotel’s most expensive asset is its building and so you should insure it for the cost of rebuilding the property should the unthinkable happen. But buildings insurance also covers the costs for repairing damage to the hotel – say if there was a fire in one of the rooms. When you calculate the rebuilding cost you should factor in any other buildings, boundary walls, swimming pool, fitted kitchens and bathrooms as well as the building itself. There are calculators online that can help you work out the rebuilding cost. If you don’t own the building you can still buy building insurance for rented property.
Much as with house insurance, in addition to buildings cover you can also include contents insurance. Insurers often describe ‘contents’ as all the things that would fall down if you turned your house or hotel upside down. So that means furniture, lamps and decorations are contents, but walls, ceilings, bathroom fittings and kitchen cabinets come under buildings insurance.
For a hotel, your contents are likely to be very important – all those lovely beds, tables and chairs you bought… so you should think about covering them as part of your insurance.
Another area is guest contents. Covering guests’ contents as part of your hotel policy means that all your customers’ belongings are protected if there was a theft, fire or another insurable event. It’s a legal requirement in line with the Hotel Proprietors Act 1956. The amount of cover you need here depends on how many guests might be staying at your hotel.
There are a few optional extras you can include on your policy too. If you or any of your staff live at the hotel you can take out personal contents cover, which works the same as home contents – you can claim if your own or staff’s personal property is damaged or stolen from the hotel.
Another option is legal cover. This option means you can claim for the cost of legal action against another party. Sometimes this can be included in your business policy, and sometimes not, so check the details if this is something you’re interested in.
Hopefully this information has helped you understand the different parts involved in a hotel policy. Now you can use comparethemarket.com to compare business insurance deals. One of our experts will be sure to find a deal that suits you.