How Much is Hotel Insurance?

20/06/2013 -- Mary Simpson
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Is your hotel, guest house or B&B located in a peaceful rural location or crime-ridden corner of inner London? 

Do you have a small band of trusted staff or high turnover of seasonal workers? 

Are the premises new build or a listed building with dodgy security…?

These are the type of issues insurers take into account when working out how much your hotel insurance will cost.

Risk Factors

  • Number of letting rooms.
  • Location (eg high crime area or subject to flooding). If you're near a seafront or promenade, you'll pay a higher premium.
  • Providing leisure facilities (swimming pool, gym or spa facilities), outdoor activities and excursions.
  • High turnover of employees.
  • If you're over 10 miles by road from the nearest fire brigade.
  • If you shut down for winter (Nov - March) or close for 3 consecutive months with no-one living in the property.
  • Providing permanent accommodation to students/DSS claimants.
  • Self-catering facilities.

How to cut Hotel Insurance premiums

  • Buy a policy where you can pay the premium monthly, interest free.
  • Put a risk management programme in place to cut the likelihood of claims by employees/guests.
  • Inform your insurer if you take on fewer staff or reduce stock levels.
  • Consider your operation of leisure facilities (health/beauty treatments, spa, gym/fitness centre, bouncy castle).

How to get Cheap Hotel Insurance

  • Make premises secure (BS standard locks, intruder alarms, CCTV) to deter break-ins.
  • Comply with the Health and Safety At Work Act.
  • Complete a thorough risk assessment of the workplace.
  • Don't leave premises unoccupied for long periods.
  • Don't store stock in basements where it's liable to dampness.
  • Make sure premises and mechanical equipment are well maintained.
  • Choose premises that are self contained with their own lockable entrance door.
  • Ensure all exit doors meet minimum security requirements

Top Tips

  • Some insurers won't pay out if you don't uncover theft by an employee within 7 days, so make sure your accounting system is robust.
  • Check small print for frozen food cover - some insurers won't pay out if refrigeration cabinets are over a certain age, or reduce pay out by 20% if over 10 years old.
  • Stock kept in basements or cellars is vulnerable to damp. Some insurers insist it’s kept on racks at least 30cm above floor level. Raising it by just a few inches could save thousands of pounds in the event of a flood.
  • Insurers demand a certain level of security as a condition of cover, often within a specific time period of the cover starting (eg 30 days). If  not implemented and there's a break-in, you won't be covered.
  • Some insurers won't cover theft by an employee who is legitimately on the premises. Check the small print. This type of insurance is sometimes called Fidelity Guarantee.
  • Read the small print so you're aware of any pre-set conditions and exclusions. For example, some cover is dependent on you having a specific type of alarm fitted or securing your equipment in a particular way.
  • The less secure the location where you keep business money (eg your home or an employee's home), the lower the amount you can expect your insurer to pay out in the event of theft.