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One of the most important aspects of owning and operating ahotel is minimizing the various physical and liability risksassociated with this type of business. Risk management is theprocess of evaluating a hotel's risk exposure and developingstrategies for mitigating those. It incorporates a program forreducing exposure supplemented by insurance protection should anincident occur. A hotel owner and operator would be far better offif they could eliminate all the possibilities of an incidentoccurring on their property. Since this is not always possible,particularly incidents they have no control over, adequateinsurance protection provides a way to reduce exposure to afinancial loss.
When reviewing your hotel"srisk management strategies, it is essential you understand all thepotential areas of exposure and exactly how insurance policies arestructured to handle the unfortunate incidents that couldoccur.
The primary areas of concern includethe property itself, premises liability, automobile liability,worker"s compensation, fidelity, boiler & machinery andumbrella. An effective risk management strategy will also reduce ahotel"s insurance cost. Saving money on insurance requiresnot only a good broker who fully understands the unique riskexposure of a hotel, but one who can also advise on a strategy thatwill reduce the chance of an incident.
Let"s look at some of theunique risks faced by hotels:
Property Risk
Property risk exposures in theindustry are primarily due to the high combustibility of contentsand multiple sources of ignition that exist in a hotel. Managingthese as...