Hotel insurance

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Owning a hotel isn't without its risks. Getting the right hotel insurance is essential in helping you deal with the financial impact, should anything go wrong.

From covering the contents of your rooms to the building itself, getting the right hotel insurance should be a top priority for any hotelier. Read our guide to make sure you're protected, and see if you can save money by comparing available policies and prices.

What does hotel insurance cover?

Running a hotel involves several considerations when it comes to insurance. You'll need to protect you, your business, your guests and staff, the property and its contents.

Here are a few different types of cover to consider, to help keep your hotel running smoothly:

  • Buildings insurance – if you own your hotel's bricks and mortar, you'll need buildings insurance. This could cover the cost of repairs to a building's structure or even a full rebuild, if needed.
  • Contents insurance – this could cover the contents within your hotel, for example furniture and equipment, against theft or fire damage.
  • Public liability insurance – if someone is injured at your hotel, or their property is damaged, you can claim on public liability insurance. It could cover compensation you owe to another party and help with any legal costs, should they decide to take you to court.
  • Product liability insurance – this could cover you in the event that a guest makes a claim based on a product you've provided. For example, it could be food, toiletries or even something from the mini-bar or the tea and coffee service. If they become ill and seek compensation, this cover could be useful.
  • Employers' liability insurance – if you employ any members of staff, by law you're required to have employers' liability insurance in place. It could protect you if an employee is injured or if they fall ill because of working for you.

How can I find the right cover for my hotel?

No two hotels are the same, and the level of hotel insurance you need will depend on a number of things, including:

  • How many rooms you have
  • The type of building you run your hotel from
  • Your turnover
  • How many staff you employ – both regularly and for events
  • If you hold events and functions – for example, weddings, business conferences and dinners.

You'll also need to think about these three key areas concerning insurance for hotels:

  • People: Your staff and guests. Public and employers' liability insurance can protect you if someone's injured or their property damaged while staying or working in your hotel.
  • Hotel building and contents: If you own your hotel's freehold, or are liable for rebuild costs, buildings cover can protect what's arguably your most expensive asset – the hotel itself – should you need to make repairs or even rebuild. Business contents cover can help protect the stock, furnishings and any equipment you need to keep your business running smoothly.
  • Income: Business interruption insurance could help keep you afloat, in the event you have to close for a period of time.

There are various other add-ons you might want to include in your hotel insurance, depending on your specific needs and the services you offer. We can help you compare policies based on your needs, to find the right hotel insurance deal for you.

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Remember to check the policy details

Each hotel is different, so before you decide on a hotel insurance policy, check the inclusions and exclusions carefully, to make sure it meets your needs. A few things which might be well worth considering are:

  • Glass replacement – you might have big picture windows to capture beautiful views, or glass doors in your building. Will your insurance cover the cost of replacing window and door frames if needed, or emergency callouts in the event of a breakage?
  • Seasonal increases – if you do a lot of business over the summer or in the run-up to Christmas, you'll need to check your policy takes into account any extra stock you might have on the premises during these peaks.
  • Gyms, swimming pools, saunas and spa treatments are now common in the hotel business– does your cover include any potential risks associated with offering these services?
  • Accidental damage – if a guest's suitcase catches on a table leg, for example, and sends a valuable vase flying, it's worth checking you'll be covered for a replacement.
  • Theft and security – are there any exclusions your policy applies to theft, forced entry, employee theft and so on?
  • Alternative accommodation – if you need to shut up shop in an emergency, you might want to consider insurance which helps cover the cost of finding your guests somewhere else to stay.
  • Cyber cover – covers the costs of computer hacking or viruses.
  • Contractors' risks – covers you if a contractor injures themselves, damages their property or causes damage to your property while working at your hotel.
  • Terrorism – covers the cost of dealing with the impact of a terrorism-related event.
  • Goods in transit – for example, food deliveries. This can help you recoup the costs of any lost or damaged goods that you need to run your business.

Frequently asked questions

Why do I need specialist hotel insurance?

Because specialist hotel insurance can offer tailored cover for the various day-to-day risks that may arise, when you work in the hospitality trade.
The best hoteliers establish a reputation for delivering excellent service, so they need specialist protection to cover unexpected events.
For example, a guest might have an accident on the premises, a bathroom could get flooded, or the kitchen could be affected by fire. Staff members could also become injured at work.

Why might I need public liability insurance cover?

Public liability insurance covers compensation claims for injury, or property loss or damage, raised by guests against your hotel.

For example, were a guest to slip on a wet floor and suffer an injury, you'd be liable since it's your responsibility to keep the property safe and risk-free.

Standard public liability limits are typically capped at £1 million. If, however, you hold functions open to non-guests – for example, weddings, business meetings and conferences – some local councils may require you to have a higher public liability limit. That could be up to £10 million.

Why might I need employers’ liability insurance cover?

If you have one or more people working for you, you'll need employers' liability insurance as it’s a legal necessity.

It typically provides cover of around £5 million. Employers' liability cover can help towards compensation costs if, for example, a member of staff suffers an illness or injury as a result of them working for you.

If you don’t have this part of hotel insurance in place, you could be fined £2,500 each day that you're not properly insured.

How can I protect my hotel building?

A hotel owner's most valuable asset is bricks and mortar. If you own your hotel's freehold, or are liable for rebuild costs, you should look for hotel insurance that covers the full cost of rebuilding the property, should the worst happen.

Buildings insurance also covers the cost of repairing any damage to the structure of your hotel. For example, if there was a fire in one of the rooms, or the roof was damaged in a storm.

When you calculate your hotel's rebuild cost, factor in any additional buildings, boundary walls, swimming pools, fitted kitchens and bathrooms, as well as the main building. It might be worth getting a professional valuation if you're unsure about the cost to rebuild your hotel.

Even if you don't own the hotel structure, you can take out buildings insurance for a rented property.

What contents insurance will I need for my hotel?

In addition to buildings cover, you’ll want to consider contents insurance to protect your hotel furniture, décor and essential stock against theft or damage.

Insurance providers describe 'contents' as all the things that would fall out if you turned your house (or hotel) upside down. In other words, furniture, lamps and decorations are considered contents, but walls, ceilings, bathroom fittings and kitchen cabinets fall under buildings insurance. Carpets are the exception to the rule and are usually covered by your contents policy.

Be sure to calculate the full value of your hotel contents, from the teaspoons to the TVs, the kitchen equipment to the linens.

You'll also need to consider guest contents cover when looking for the right hotel insurance policy. That way, your customers' belongings can also be protected against theft or damage.

This type of cover is a legal requirement, in line with the Hotel Proprietors Act 1956. You'd be liable for any compensatory claims, even if the loss or damage wasn't caused by you or your staff. The amount of cover you need depends on how many guests might be staying at your hotel, at any given time.

Why might I need business interruption cover?

This type of hotel insurance covers your loss of income after a disaster, whereby you can't operate business as usual. For example, if your hotel is flooded, business interruption insurance could help keep your finances ticking over while you're unable to accommodate guests.

What possible policy add-ons should I consider?

There are a few optional extras you can add to your hotel insurance policy. These include:

  • Personal contents cover 
    If you or any members of staff live in the hotel, you might want to think about personal contents cover to protect your personal possessions. This works just like home contents insurance – you can claim if you or your staff have personal property damaged in, or stolen from, the hotel.
  • Legal cover
    This option helps with the costs of legal action against another party. This is sometimes included in your business insurance, and sometimes not. Check the details of your policy if this is something you think might benefit you.

Some insurance providers also offer a telephone helpline service, to give you expert advice on anything from legal matters to health and safety issues.

What’s the difference between a hotel and a guest house?

You might be confused about whether you need hotel insurance or guest house cover. The AA, in its accommodation ratings and inspection guide, defines them as follows:

  • Hotel: Formal accommodation offering full hotel service.
  • Guest house: Accommodation for more than six paying guests, with the owner and staff providing more services such as dinner.

The main difference between the two is the 24/7 service on offer at hotels, with hotels also typically offering more rooms.

How can I compare insurance quotes?

Whether you run a full-service hotel or a small guest house in the country, just tell us a bit about the kind of business you have and we'll help you find the right insurance quote for you, your staff and your guests.

Start a quote with us and we'll search the most competitive prices for the different types of insurance you might need, for your hotel or guest house.

What do I need to get a quote?

To get a quote, you'll need to answer a few questions about you and your business, including:

  • the type of business you have
  • your business name and address
  • number of years in business
  • your forecasted turnover
  • number of employees
  • your personal details
  • your claims history
  • cover details and options

Once we have the information we need, we'll send you a list of quotes and you can start comparing.

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Emily Kindness

Business insurance expert

What our expert says

“If you’re planning to expand your hotel - for example, add more rooms, a tennis court or swimming pool - it could impact your insurance. Make sure you keep your insurance provider up to date with any changes you make to your hotel. If you don’t let them know, it could invalidate your policy.”