Hotel and motel insurance in California is imperative to fend off inconveniences caused by natural calamities, liability lawsuits and more. Here’s what all you need to know.
The California hotel industry rakes in $30 billion annually and growing. With a 3.5% upsurge in tourist inflow, and favorable business environment and policy initiatives, it’s easy to guess why.
On the flip side, hospitality establishments are prone to force majeure, guest negligence and liability lawsuits. Dealing with them often costs you fortunes. Take, for instance, the jury verdict that awarded a hotel guest whooping $38.6M compensation in a premises liability lawsuit. Also, a manager who conceived on-duty sued the motel for $10M for being roughly handled.
Whether you operate a hotel or motel, the threat is real for you. Thankfully, a tailored motel insurance California cover can hedge you against such adversities. The policy will fund losses you incur in wake of a natural calamity or lawsuit. That’ll help you ease-out the financial stress, ward off bankruptcy and bounce back. In short, an insurance cover is existentially useful.
Motel insurance is a package policy, meaning one policy offers several coverages simultaneously. Here’s a checklist of what all is typically covered in your policy.
- General Liability
California mandates General Liability coverage for every hotel or motel. It safeguards you against lawsuits about any damage to person or property within your premises. It also includes other liability claims, such as food poisoning. The coverage requirements may vary, but at least $1M in coverage is always advised for each room in your establishment.
- Employee Indemnity:
An employee compensation program is a requisite for any sector, including hospitality. Any violation could attract a stop order or heavy fine. The program supports medical expenses for an injury that an employee sustains on-duty. It can be self-funded or through motel insurance.
- Property Insurance:
As the name gives it away, Property insurance coverage extends to the motel’s building and the possessions within. Furniture, appliances, carpeting, equipment, and artwork all count. This coverage compensates for damages caused by fire, theft, vandalism, inclement weather, and more. The coverage limit is usually around $250M for every motel location across California.
- Flood coverage:
California is no stranger to the devastation of floods. But, at least, you have flood motel insurance Anaheim to rely on. It’ll make up for the loss of property and income due to floods.
- Business interruption coverage:
Certain circumstances like natural calamity or repairs might lead you into closing your motel for some time. Here, the business interruption coverage kicks in, supporting all your monthly business expenses, including equipment maintenance, staff salaries and more.
- Fidelity and Crime:
The threat of fraud, staff theft, and cybercrime looms large for hoteliers. The Fidelity and Crime motel insurance can come to your rescue, helping you recover and bounce back.
- Employment Practices:
When an unhappy employee files a lawsuit against you, this coverage pays for the court fees.
- Liquor Liability:
It’s imperative for a hotel serving liquor. In case a guest is served excessive alcohol, which leads him to harm someone else or property, liquor liability comes to the picture.
- Cyber risk:
Let Cyber risk liability hedge you against any data breach where the customer’s pertinent information is compromised.
- Food borne illness coverage:
Should a guest suffer illness after consuming contaminated food served in your premises, this rider can pay the compensation. The major contaminants covered are Salmonella and E. coli.
The Motel insurance California cost is subject to multiple factors, such as, but not limited to:
- Age: The older the property, the higher the premiums will be. The older property is likely to suffer more damages vis-à-vis a recently constructed one, that’s why.
- Location: Certain areas are more susceptible to certain calamities. For example, only coastal areas experience the devastation of high winds. The risk to the insurer is higher if you are located in these areas, and hence, higher premiums.
- Measurement: Size does matter when it comes to Motel insurance Anaheim. More rooms mean more liability risk, and of course, higher premiums.
- Roof condition: An old, derelict roof is a safety hazard, attracting higher premiums than the new, building-code compliant one.
- Safety measures: A property well equipped with security features ensures lesser risk for the insurer. So, the costs will be lower. This applies to parking lot security also.