Risk and Insurance for Accommodation Establishments

Your Guide to Risk & Insurance: Accommodation Establishments

Providing short stay accommodation is the core service of any accommodation establishment and because of this, your business is exposed to several operational hazards. You may own and run a small Bed & Breakfast, perhaps you manage a medium sized boutique Hotel/Motel or perhaps you operate a large resort style facility with swimming pools, children’s play facilities and a restaurant. The bottom line is that your establishment welcomes members of the public to spend time on your premises, and this poses significant business risks.

Having the correct insurance program in place can help you with the management and transfer of these risks, giving you the peace of mind and support necessary to run a successful operation.

What are the risks faced by accommodation establishments

Loss or damage to your property, which may also result in a financial loss following interruption to your business, as well as claims made against you from guests, suppliers, or employees alleging illness, personal injury or financial loss.

The core service of an accommodation establishment is providing overnight lodging and, in some cases, meals for guests. These types of services give rise to a niche set of claims that your insurance policy may respond to.

Some of the common claims include:

• Claims from guests for bodily injury or sickness in connection with incidents such as slips, trips and food poisoning.
• Damage to your building or property, following accidental damage, fire or water ingress, as well as the subsequent interruption to your business if forced to close facilities for repair.
• Damage to your building or property as a result of natural catastrophes, such as flood, bushfire, cyclone or hail, which could include interruption to your business if guests are prevented from access due to roads or flights closures.
• Theft of your property or your guest’s property.
• Breakdown of machinery such as fridges, freezers or air conditioners, and any expenses incurred for repairs or interim measures.

Claims alleging personal injury or property damage

Patrons regularly visit your premises and stay at your establishment. There is risk that your guests might experience personal injury to themselves or that their belongings may be damaged or stolen whilst on your premises.

Claims from employees for injury or employment conditions

Whilst the nature of the work performed by employees is in most cases not particularly hazardous, except for kitchen work, housekeeping, repair and maintenance, the risk will increase for larger workforces and if there is restaurant / food preparation.

Damage to your property

The risk of damage to your property will vary depending on the building design and construction; the fire load including but not limited to furniture, fixtures and fittings, contents, linen, cleaning materials, alcohol and food product; Guest activities e.g. whether cooking facilities are provided for guests, The range of guest services provided; and the extent of safety measures taken by management.

Machinery Breakdown Incidents

Accommodation businesses generally contain non-specialised mechanical and electrical equipment, which helps for a straightforward replacement or repair. However, there can be heightened urgency for immediate repairs or preventative measures, in some situations, such as when a venue carries a high value of perishable goods in refrigeration.

Business Interruption Risks

As your buildings and premises are integral to the generation of income for your business, a total or even partial property damage event such as a storm or fire could result in your inability to trade. It is important that you safeguard yourself and your business against this risk to protect future income after a devastating event.

Insurances that are designed to protect accommodation establishments

Public & Products Liability

Covers legal liability to pay compensation to third parties for bodily injury and/or property damage caused by the business activities or products.

Business Package / Industrial Special Risks

Covers the cost of repairing or replacing physical assets following loss or damage by an insured event and the resultant business interruption.

Machinery Breakdown

Machinery breakdown cover, also known as equipment breakdown insurance, is a type of insurance that provides protection against the financial losses associated with the sudden and accidental breakdown of machinery and equipment. This coverage goes beyond what is typically covered in standard property insurance policies and covers repair and replacement due to mechanical failure.

Management Liability

Covers the Directors and Officers and the company itself from exposures relating to the management of a company. It covers damages and legal expenses incurred due to a breach or alleged breach of duty, misleading statement or wrongful act by a director or officer.

Cyber & Privacy Liability

Cyber insurance can cover both First Party and Third-Party losses as a result of Cyber events and security breaches including (but not limited to): hacking attacks; Virus and any malicious software codes; actual or suspected breach of privacy, and social engineering.

Want to protect your accommodation establishment?

Barrack Broking can help.

Get free initial advice

mail@barrack.com.au   1300 605 101