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Running a hotel or bed and breakfast can be a dream come true.
The hospitality industry in Canada is worth over $22 billion—and this is a number that’s only expected to rise. While profit might await you should you decide to open a hotel or other short-term rental business, your dream can quickly become a nightmare without careful planning.
Accidents can and do happen.
Repair bills are expensive. Medical bills are, too. All it takes is one legal battle to completely bankrupt your business and ruin its integrity. As a hotelier and property owner, you need to prepare for the worst before ever opening your doors.
Enter hospitality insurance.
What Is Hospitality Insurance?
Also known as hotel insurance, this is an insurance plan designed to cover hospitality businesses from the risks and hazards they face while operating their business. This includes third party property damage or bodily injury lawsuits, as well as help for covering the costs of an accident or a loss due to criminal activity.
Hospitality insurance can also include coverage for legal fees and medical bills in case an employee gets hurt while on the job. Considering the number of employees who work in a typical hotel—from the kitchen to the cleaners—this is a real concern!
Hotel Insurance: Why It Matters
A guest slipping and falling on a wet floor or an employee hurting themselves while replacing your hotel’s ceiling light may seem like minor incidents, but they can have serious implications for your business. Your guest could file a claim against you, and your employee could decide to seek compensation for injuries they sustained while working at your hotel.
Without proper coverage in place, you’ll be stuck paying these expenses out of your own pocket. Depending on the severity of the situation, this could lead to bankruptcy as the legal fees mount and unexpected complications arise.
This is why having specialized hotel insurance is crucial if you want to continue running a profitable business. Some of the benefits of having this type of insurance include:
- Protecting your property against damages by unruly guests
- Protects other assets, such as hotel equipment, company cars, and more
- Coverage for situations outside your control, such as fire, theft, harsh weather conditions, and other business-interrupting situations
In most cases, having insurance also makes it easier to be granted an alcohol license from governing bodies. Serving alcohol is lucrative and certainly not an opportunity you should overlook if your business serves food and drinks!
What Hospitality Insurance Covers
Every policy is different depending on your operations as a business. Factors like how many years you’ve been working in the hospitality industry, the location of your property, as well as the types of services and amenities you provide to your guests all contribute to what an insurance plan should cover.
With all that being said, a comprehensive hotel insurance policy from a reputable brokerage should typically include the following:
Commercial General Liability (CGL) Insurance
CGL policy protects you from expenses borne out of third-party injuries, property damage, or claims alleging negligence caused by your business. This includes coverage for slip-and-fall cases, repairs or replacement costs, and damages caused by accusations of defamation, slander, libel, or false advertising.
Liquor Liability Insurance
In some insurance bundles, liquor liability insurance can be added to protect your business against risks related to incidents involving intoxicated guests. This can extend to injuries they cause to others or themselves.
Commercial Property Insurance
This insurance plan protects your hotel’s structure and its contents. Commercial property insurance also provides financial support for your fixtures and furnishings and your inventory in case it gets damaged from fire, flood, extreme weather conditions, or theft and vandalism.
Business Interruption Insurance
This is a type of commercial insurance that protects your business’s income in case of interruption to your daily operations.
One example of such a situation would be if a natural disaster hits your hotel and forces you to close your doors. Business interruption insurance would cover your losses, as well as contribute to repairs for any physical damage to the property. It would also cover the costs of any operating expenses during that time.
Cyber Liability Insurance
Businesses are never safe against online hackers or data breaches.
Cyber liability insurance protects your business from losses if your important data gets stolen or breached. It provides financial support for legal expenses or for repairing your software systems. It also covers losses arising from a system outage due to a cyberattack.
Workers Compensation Insurance
This provides financial support to your staff in case they fall ill or are injured while working at your establishment. It could also include partial salary payments in case of lost wages and coverage for medical fees as a result of their injuries.
Who Needs Hotel Insurance?
Generally, all businesses that fall under accommodation or lodging in the hospitality industry need hotel insurance. Examples of these types of businesses include:
- Airbnb property owners (or other home-sharing platforms like Vrbo)
- Bed and breakfast (B&B) owners
- Hostel and motel owners
- Guest house owners
- Lodge owners
- Inn owners
- Resort operators
Why Choose KASE Insurance?
A comprehensive hotel insurance policy protects you and your guests from unforeseen accidents.
However, not all insurance providers are made equal. Your hospitality insurance broker should understand your industry and the needs of your business.
KASE Insurance is an award-winning brokerage based in Toronto. We have extensive experience providing customized insurance policies to our clients in the hospitality industry. Our team of experts is ready to get you the coverage you need.
Contact our brokerage today to learn more or get started with a custom quote!
(416) 588 5273 
