Hotel Insurance

A hotel package insurance policy normally combines hotel building insurance for the premises, contents and hotel property insurance for furnishings, fixtures and equipment, stock including food and drink behind the bar, public and products liability, employers' liability for your staff, and business interruption to replace lost income while you cannot trade. Most hotels also add guests' property cover, money, glass, and cover for the kitchen and its extraction system. If you run a bar or restaurant on site, hotel and bar insurance is written into the same policy rather than bought separately.

A small hotel or guest house often comes in at around £1,000 a year including insurance premium tax, and a very small owner run B&B with a handful of rooms can be less than that, because the sums insured on the building, contents and stock are lower and the turnover is smaller. From there it scales with the building and the trade: a larger provincial hotel with a busy bar, restaurant and function business runs into several thousand a year, and hotel insurance in London and other high value locations sits higher again because rebuild costs and liability exposures are greater. What moves your hotel insurance price is predictable: the rebuild value of the building, your annual turnover, the number of bedrooms and staff, whether you hold functions or late licences, the age and construction of the property, and your claims history over the last five years. A listed building, a thatched roof, a flat roof in poor condition, or a previous fire or escape of water claim all push it up. These are genuine ball park figures rather than a quote, so tell us the details and we will give you a real one.

Employers' liability insurance is a legal requirement in the UK as soon as you employ anyone, including part time and seasonal staff, with a fine of up to £2,500 for each day you are uninsured. Public liability is not a legal requirement but is essential in practice, because a hotel invites the public onto the premises around the clock. Hotel liability insurance also needs to include products liability for the food and drink you serve, which responds to food poisoning allegations, and it should cover defence costs as well as damages.

Legally you need employers' liability if you have staff, and motor insurance for any vehicles. Everything else is contractual or commercial: your mortgage lender will require hotel building insurance, your licence and local authority will expect adequate public liability, and function or wedding clients often ask to see cover of at least £5 million. Beyond insurance, your fire risk assessment under the Regulatory Reform (Fire Safety) Order is what insurers will ask about first, along with maintenance records for the kitchen extraction and electrical installation.

The things that genuinely reduce hotel insurance cost are the ones insurers can verify. A current fire risk assessment, an annually cleaned and certificated kitchen extraction system, a monitored fire and intruder alarm, a five yearly electrical installation condition report, and portable appliance testing all help. So do sums insured that reflect real rebuild and replacement values rather than round numbers, because underinsurance is penalised at claim stage rather than at quotation. A clean claims record over five years is the single biggest factor. Paying annually rather than monthly removes credit charges, and consolidating buildings, contents, liability and business interruption into one hotel package insurance policy is almost always cheaper than buying them separately.

Yes. Hotel and guest house insurance is arranged the same way whether you have four bedrooms or forty, and B&B insurance cover is arranged in the same way. Smaller properties are often owner occupied, which means the policy has to deal with the private living quarters as well as the commercial part of the building. That is a detail generic business insurance frequently gets wrong, and it is worth checking on any existing policy.

Yes. Where a hotel has a public bar, restaurant or function room, that trade is rated as part of the same policy. It changes the risk rather than sitting outside it: alcohol sales, late opening, live entertainment and commercial catering all affect the terms. Tell us the split between accommodation and wet or food led income, because a hotel earning most of its money from the bar is a different risk to one that mainly sells rooms, and the two are priced differently.

Guests' property cover can be included and is worth having. Under the Hotel Proprietors Act 1956 a hotel can be strictly liable for loss or damage to a guest's property, subject to limits, provided the statutory notice is properly displayed. The cover responds to that liability. Higher value items left in a room, and anything a guest asks you to hold, usually need to be declared separately, so check the inner limits rather than assuming the headline figure applies to everything.

Yes, and they need underwriting rather than a computer quote. Boutique hotel insurance often involves high specification fit outs where the reinstatement cost is far above the standard rate per square metre. Listed buildings have to be reinstated using original materials and methods, which frequently doubles the rebuild figure, and local authority requirements can add more. We place these with insurers who will agree a realistic sum insured up front rather than dispute it after a fire.

Business interruption replaces the gross profit you lose while you cannot trade after an insured event such as a fire or flood, and it pays for the indemnity period you choose. Twelve months is the common default and it is usually too short for a hotel. A serious fire in a period property routinely takes eighteen months to two years to rebuild once loss adjusters, planning and listed building consent are involved, and if your indemnity period runs out before you reopen the cover simply stops. We normally recommend twenty four or thirty six months for hotels.

Often, yes. Escape of water and accidental damage claims are common in hotels and do not by themselves make a risk uninsurable. What matters is what changed afterwards. If you can show the cause was addressed, for example a full rewire, a replaced flat roof, or new leak detection on the plumbing, there are insurers who will look at it properly. We work with distressed and difficult claims histories rather than turning them away.

We are an independent broker, so we place hotel insurance across the specialist hospitality insurers rather than being tied to one. That matters more in this trade than most, because the difference between a generic commercial combined policy and a proper hotel package insurance policy shows up in the detail: guests' property, loss of licence, spoilage of stock, and the indemnity period on business interruption. We compare the wording, not just the price.