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What Hotel Property Insurance Covers
Hotel property insurance covers the building, the fit-out, the guests, the food and beverage operation and the room revenue of a hotel, motel, pub, serviced apartment block or function venue. An accommodation property is a building, a restaurant, a bar and a landlord all at once, and the policy has to answer each of them.
The losses are the hospitality ones at a larger scale. A kitchen fire spreads through the services riser and closes forty rooms. A guest falls in the shower or on the stairs. A function guest is injured after the bar has been serving for six hours. Storm takes the roof and the bookings for the season with it. A burst pipe on the top floor runs through every floor below.
Licensed premises carry conditions under the liquor licence, and a hotel with a restaurant must meet the Food Standards Code. The owner needs public liability insurance for guests and visitors in every part of the building, and business interruption insurance set on room revenue, not food sales, because the rooms are where the money is and the rebuild of an accommodation floor runs for months.
Fortis Risk Solutions arranges hotel property insurance for owners and operators across Australia from offices in Box Hill and Hawthorn, as part of our business insurance range. We look at construction, fire protection, the licence, the lease or management agreement and the revenue split before going to insurers. Where the building and the operation are owned separately, we place both sides so they meet without a gap.
Who this covers
Businesses in this group include:
- Hotels and motels
- Pubs and hotels with accommodation
- Serviced apartments and apartment hotels
- Resorts and holiday parks
- Function and conference venues
- Boutique and heritage hotels
If your business is not listed, ask us. The sections below are the starting point for any business in the group.
Hotel Property Insurance: Cover Sections and Benefits
Hotel Property Insurance FAQs
Property cover for the building and the fit-out, public liability for guests and visitors, liquor liability where the bar is licensed, and business interruption set on room revenue. A business insurance package carries the kitchen, bar, theft and glass sections, with machinery breakdown for the plant. Workers compensation is compulsory for every employer and sits separately.
On room revenue, function revenue and food and beverage together, with an indemnity period long enough to rebuild accommodation floors and win back the bookings. A hotel that loses a summer season does not recover in the following month, and a twelve month period is often too short. Owners who lease to an operator insure loss of rent instead.
The management agreement or the lease decides. Usually the owner insures the structure and the base building plant under commercial property owner insurance, the operator insures the fit-out, contents, stock and the trading liability, and each names the other as an interested party. We read the agreement before either policy is placed, because the gap between the two is where hotel claims get stuck.
Under a guest property section, up to the limits in the schedule, for belongings stolen from rooms or damaged by an insured event. Valuables held in the hotel safe carry their own limit. Hotels also carry a common law duty as an innkeeper, and public liability answers a claim where the hotel is found negligent in protecting guest property.
Often both. The building sits under a strata insurance policy held by the owners corporation, the operator insures the fit-out, the contents and the business, and individual owners who let their apartments into the pool need a landlord wording that allows short term letting. Which policy responds to a claim depends on where the damage happened and who was negligent.
Hotel wordings turn on liquor conditions, the revenue basis, the split between owner and operator and the fire protection conditions insurers impose. FRS helps you disclose the operation and the agreements accurately, structure the sums insured and the indemnity period against real rebuild times, compare insurers who write accommodation risk and act as your advocate at claim time. The operating side of the trade is covered under our hospitality insurance group.
Talk to a broker about Hotel and Hospitality Property Insurance
Call 03 7046 3766 on weekdays between 9:30am and 6pm, email admin@fortisrisksolutions.com.au, or send an enquiry and a broker from our Box Hill or Hawthorn office will come back to you about hotel and hospitality property insurance. Tell us what the business does and what the lease or contract asks for, and we take it from there.