Hotel Insurance: Coverage, Costs & What You Actually Need

Running a hotel means juggling guests, staff, vendors, and a building that never closes. Insurance is the thing nobody wants to think about, until a guest slips by the pool, a kitchen fire shuts down the property for three months, or an OTA breach exposes ten years of card data.

Whether you call it hotel insurance, hotel business insurance, or commercial hotel insurance, the coverage needs are the same. They're broader than what a generic small-business policy provides, and they're shaped by your franchise, your lender, and the state your property sits in. Hotel insurance is a packaged commercial program that covers a lodging business's building, contents, employees, guests, and third-party liability, combining property, general liability, liquor liability, workers' compensation, business interruption, cyber, and several hotel-specific coverages into a single program.

This guide breaks down what's in that program, what it costs, and where the gaps usually hide.

Key Takeaways

• Hotel insurance is a packaged program that bundles 6 to 10 individual coverages: property, general liability, liquor, workers' comp, cyber, business interruption, equipment breakdown, crime, commercial auto, and umbrella.
• Standard small-business BOPs leave material gaps for hotels: innkeepers liability, brand-standard requirements, liquor, large pools, cyber/PCI, and 24/7 GL frequency.
• A small to mid-size limited-service hotel typically pays $8,000 to $20,000 per year for a comprehensive package; full-service and branded properties run $50,000 to $200,000+.
• Franchisors (Marriott, Hilton, Hyatt, IHG, Choice, Wyndham) and CMBS lenders impose specific minimum schedules: typical asks include $1M/$2M GL, $5M+ umbrella, replacement-cost property, additional-insured + waiver of subrogation, and TRIPRA.
• Bedbug claims, mold, and pandemic-related losses are usually excluded by default, and innkeepers liability for guest property only applies if your in-room and front-desk notices are statute-compliant.
• Latent Insurance Services is an independent brokerage that helps hotel owners build a complete coverage program, comparing options across 20+ carriers to satisfy franchise, lender, and state requirements without overpaying.

What Is Hotel Insurance?

Hotel insurance is a bundled commercial program that covers a lodging business's property, guests, employees, and third-party liability. It combines commercial property, general liability, workers' compensation, business interruption, liquor liability, cyber, and several hotel-specific coverages, like innkeepers liability and equipment breakdown, into a single program.

A hotel sits at the intersection of real estate, food and beverage, retail, and hospitality services, and each one adds a different exposure. You're a landlord (the building), a restaurant operator (the F&B), a retailer (mini-bar, gift shop), and a 24/7 service business all at once. That hybrid model creates layered risk that neither a standard Business Owner's Policy (BOP) nor a generic restaurant insurance policy is built to handle.

A typical hotel program combines six to ten individual coverages: property, general liability, liquor liability, workers' compensation, cyber, business interruption, equipment breakdown, umbrella, crime, and commercial auto. Hoteliers often refer to the whole package as their "hotel insurance policy," but it's almost always several policies stitched together.

Getting this wrong is expensive. In 2024, Marriott reached a $52 million multi-state settlement over a breach that exposed 383 million guest records, on top of an £18.4 million ICO fine in 2020 and prior class-action claims. MGM Resorts disclosed a $100 million operational impact from a single 2023 ransomware attack. These aren't outliers, they're the new baseline for how a single coverage gap plays out at scale.

Why Hotels Need Specialized Coverage

Hotels have higher claim frequency and severity than almost any other small-business class. Pools, 24/7 guest traffic, food service, alcohol, cyber/PCI exposure, brand-mandated coverage, and heavy real estate make a generic BOP a poor fit for the actual risk.

Here's what a hotel program has to absorb that most small-business policies don't:

• Slip-and-fall guest injury. Lobbies, bathrooms, parking, pools, gyms, and outdoor areas operate around the clock, which means GL frequency is materially higher than for retail or office tenants. Slip-and-fall claims are the most common hotel GL claim and routinely settle in the five-to-six figures. (Slip-and-fall coverage primer →)
• Pool and water hazards. Drownings, slips, chemical exposures, and unsupervised-guest incidents are the most catastrophic GL trigger in hospitality. A single pool drowning can expose a hotel to multimillion-dollar verdicts.
• Innkeepers liability and guest property. Most states have an innkeepers statute that caps a hotel's exposure for stolen or lost guest belongings, but only if specific in-room and front-desk notices are posted. New York GBL §201, California Civil Code §1859, and Florida Stat. §509.111 each set their own caps and notice requirements. If the notice is missing or out of compliance, the cap is voided and the hotel is on the hook for the full loss.
• Liquor and F&B. Bar service, mini-bars, banquets, and room service all create dram-shop exposure. Liquor liability is excluded from standard general liability, and dram-shop laws apply differently in Texas, Florida, and New York. Hotels with banquet operations also need private event endorsements above standard GL limits.
• Cyber and PCI. Hotels store millions of card transactions and detailed guest PII (passport, loyalty, payment, sometimes biometric) across reservation systems, property-management systems, and third-party booking integrations. The Marriott breach started with the Starwood reservation system; the MGM ransomware attack shut down digital keys, slot machines, and reservations across the portfolio for nine days.
• Bedbugs, mold, and contaminants. Standard property and GL forms exclude infestations and contaminants. Bedbug class actions, often amplified by TripAdvisor and Reddit, are a recurring hotel-specific exposure that requires a specialty endorsement.
• Brand and franchisor standards. If you fly a Marriott, Hilton, Hyatt, IHG, Choice, or Wyndham flag, the franchise agreement specifies minimum coverage limits, named-insured language, additional-insured + waiver of subrogation requirements, replacement-cost property, and TRIPRA. Common flagged-hotel asks include $1M/$2M GL, a $5 million or larger umbrella, and replacement-cost property. The exact dollar minimums vary by brand and tier and are detailed in the franchisor's insurance schedule.
• Lender and mortgagee requirements. CMBS hotel loans typically require lender as loss payee + mortgagee, replacement-cost property with agreed value, business interruption with an extended period of indemnity, and specific deductible caps.
• Vendors, valet, weddings, and OTAs. Your hotel will both demand and issue certificates of insurance. Wedding vendors, film crews, and trade shows commonly require named-additional-insured status. And OTAs like Booking.com, Expedia, and Hotels.com are increasingly asking for indemnification and COI evidence on listed properties.

A generalist broker selling you a one-size BOP won't reconcile any of that. Specialty hotel programs are built around it.

What Does Hotel Insurance Cover?

There's no single "hotel insurance policy." It's a package of coverages, each protecting against a different risk. Here's what each one does and what to watch for in the fine print.

Hotel Property Insurance

Commercial property insurance covers physical damage to the hotel building, FF&E (furniture, fixtures, equipment), inventory, signage, pool and parking-lot improvements, and outdoor fixtures.

What it covers:

• Fire, smoke, and explosion
• Wind, hail, and named storms (often sub-limited or excluded in coastal Florida and Gulf states; may need a separate policy or wrap)
• Water damage from sprinklers, plumbing, and roof failure
• Vandalism and theft of physical contents
• Replacement of FF&E after a covered loss

Watch-outs:

• Replacement cost vs. actual cash value. Most lenders and franchisors require replacement cost. Actual cash value pays out depreciated value and almost never funds a real rebuild.
• Insurance to value. Under-reporting your Total Insured Value to save premium triggers coinsurance penalties at claim time. Get a current replacement-cost appraisal every three to five years.
• Flood and earthquake. Almost always excluded by default. Hotels in FEMA flood zones, on the California coast, or in named-storm corridors need separate policies (NFIP, private flood markets, DIC, parametric).
• Vacancy. Hotels in renovation or seasonal closures can trip vacancy clauses. Confirm vacancy permits are in place during off-season.

Hotel Liability Insurance (General Liability)

Hotel liability insurance, or commercial general liability (GL), covers third-party bodily injury and property damage that happen on hotel premises or because of hotel operations. It's the policy that responds to a slip-and-fall, a guest injury at the pool, or a child's parking-lot collision with a courtesy van.

What it covers:

• Slip-and-fall in the lobby, bathroom, hallway, or parking lot
• Pool or spa injuries (drowning, slip, chemical exposure)
• Bodily injury caused by hotel staff (not in a vehicle, not under medical care)
• Property damage caused by hotel operations
• Personal and advertising injury (libel, slander, copyright in your advertising)

What it doesn't cover: liquor-related claims (separate policy), employee injuries (workers' comp), professional services (separate E&O if you offer concierge medical or financial advisory), and cyber events (separate cyber policy).

Typical limits: $1 million per occurrence / $2 million aggregate is the floor. Branded and CMBS-financed hotels routinely require $2M/$4M or higher, plus a $5 million or larger umbrella.

Liquor Liability Insurance

If your hotel has a bar, restaurant, room service, banquets, or even an honor-bar mini-bar with alcohol, you need liquor liability insurance. Standard general liability excludes liquor-related claims, period.

What it covers:

• Injuries or property damage caused by an over-served guest after they leave the property (dram-shop liability)
• Assault and battery related to alcohol service (with the right endorsement)
• Defense costs in liquor lawsuits, even when the claim is meritless

State dram-shop laws determine how aggressively a hotel can be sued, and the rules in Texas, Florida, and New York are very different from each other. (Liquor liability and dram shop explained →, and private-event endorsement guidance →.)

Innkeepers Liability and Guest Property

Innkeepers liability is the hotel-specific endorsement that covers your liability for guests' lost, stolen, or damaged property, including items left in safe-deposit boxes.

What you need to know:

• Most US states have an innkeepers statute that caps a hotel's exposure if specific in-room and front-desk notices are posted. Caps typically range from $500 to $1,000 per guest.
• New York GBL §201, California Civil Code §1859, and Florida Stat. §509.111 all have specific posting requirements.
• If the required notice is missing, in the wrong location, or out of date, the cap is voided. We frequently see hotels lose this defense at claim time because no one re-checked the in-room placards after a renovation.

This is one of the most overlooked areas of hotel insurance, and it's almost always missing from competitor pillar pages.

Business Interruption Insurance

Business interruption (BI) replaces lost revenue and continues fixed expenses if a covered property loss takes the hotel offline.

What it covers:

• Lost room revenue and ADR after fire, hurricane, water damage, or extended utility outage
• Payroll continuation for key staff
• Fixed expenses (mortgage, lease, taxes) during the rebuild
• Civil-authority orders that block access to the hotel
• Extra expense (alternate-site costs, generator rental, guest re-accommodation)

Watch-outs:

• Period of indemnity. Standard BI runs 12 months. A full rebuild often takes 18 to 36 months, so most hotels need an extended period of indemnity endorsement.
• Pandemic and virus. Excluded almost universally after COVID-era court rulings.
• Utility services. Power and water outages are excluded unless you specifically add the endorsement, and they're a real exposure for hotels in the Gulf, Texas, and California.

Workers' Compensation Insurance

Workers' compensation is required in nearly every state for any non-owner employee. Texas is the lone state where private employers can opt out, and even then most hotel lenders and franchisors require it anyway.

Hotel exposures that drive workers' comp severity:

• Housekeeping: back, shoulder, and needlestick injuries; the highest-frequency claim type in hospitality
• Kitchen: burns, knife cuts, slips on wet floors
• Maintenance and engineering: falls, electrical, lockout/tagout
• Front desk and security: assault, hold-up, hostile-guest incidents
• Pool deck, banquets, valet: slips, lifting injuries, vehicle incidents

Higher mod factors are common in hotels. Tighter safety programs (lift training, bloodborne-pathogen and sharps protocols, slip-resistant footwear) directly reduce premium at the next renewal.

Hotel Cyber Liability Insurance

Cyber liability covers the financial fallout of a data breach, ransomware attack, business email compromise, or system failure. Hotels are PCI-DSS-regulated and store guest PII (passport, loyalty number, payment, sometimes biometric data) across reservation systems, property-management systems, third-party booking integrations, and Wi-Fi networks.

What it covers:

• Breach response: forensic investigation, notification, credit monitoring
• Regulatory fines and defense (state breach laws, HIPAA where applicable, PCI assessments)
• Ransomware extortion payments and recovery costs
• Business interruption from a cyber event (separate from BI under property)
• Social engineering and business email compromise
• Third-party liability for customer data exposed

Real-world severity:

• Marriott consolidated breach: 383 million guest records exposed, $52 million multi-state settlement (October 2024), £18.4 million UK ICO fine (2020).
• MGM Resorts ransomware (2023): $100 million operational impact disclosed in the company's Q3 8-K, with nine days of disruption to digital keys, slot machines, and reservations.

A 50-room limited-service hotel doesn't process Marriott's volume, but it processes thousands of card transactions a year and is on the same PCI-DSS hook for breach notification. (Cyber risk insurance explained →, cyber FAQ →.)

Equipment Breakdown (Boiler & Machinery)

Equipment breakdown covers mechanical or electrical failure of HVAC, boilers, elevators, kitchen equipment, refrigeration, laundry equipment, and pool systems.

Standard property insurance excludes pure mechanical or electrical breakdown, that's the gap equipment breakdown fills. For a hotel, the policy almost always pays for itself on the first chiller or elevator failure. Most hospitality programs include it by default; if yours doesn't, add it.

Crime Insurance and Employee Dishonesty

Crime coverage protects against employee theft, robbery, hold-up, and money in transit.

Hotel-specific exposures:

• Cash drawer and front-desk theft
• Mini-bar and housekeeping cash sweeps
• ATM and safe burglary
• Money and securities in transit to the bank or armored carrier
• Forgery and computer fraud

Most franchise agreements require some level of crime insurance, often $25,000 to $100,000 in employee dishonesty coverage at minimum.

Commercial Auto and Hired/Non-Owned Auto

If your hotel owns shuttles, vans, or courtesy cars, you need commercial auto. If your employees ever run airport pickups, supply runs, or guest errands in their personal vehicles, you also need hired and non-owned auto (HNOA).

HNOA is a frequent gap. A valet attendant or shuttle driver using their own car after-hours can create vicarious liability for the hotel. Most personal auto policies exclude business use, leaving the hotel exposed if the driver is in an at-fault accident. (HNOA explained →, HNOA cost factors →.)

Commercial Umbrella and Excess Liability

A hotel umbrella policy sits on top of GL, liquor, auto, and employer's liability, providing higher limits when an underlying policy is exhausted.

• Most flagged hotels are required to carry a $5 million or larger umbrella.
• CMBS-financed hotels often see lender requirements of $10 million or more.
• Pool injuries, multi-vehicle shuttle accidents, and serious assault claims are the most common drivers of umbrella claims in hospitality.

A 60-room limited-service property with a pool, bar, and shuttle service that doesn't carry an umbrella is one bad claim away from a personal-asset exposure for the owner.

Other Coverage to Consider

• EPLI (Employment Practices Liability): wrongful termination, harassment, wage-and-hour. Hospitality is a high-frequency EPLI class. (EPLI overview →, EPLI cost factors →.)
• Pollution liability: for fuel tanks, generators, pool chemicals, and mold.
• Terrorism (TRIPRA): required by most lenders and many flagged hotel franchise agreements.
• Builders risk: during renovation, expansion, or new construction.
• Special-event endorsements: for weddings, conferences, and banquets that exceed standard GL limits.

How Much Does Hotel Insurance Cost?

Hotel insurance typically costs $8,000 to $40,000 per year for a small to mid-size limited-service hotel and runs $50,000 to $200,000+ for full-service or branded properties. The biggest cost driver is total insured property value (TIV), followed by room count, services offered (pool, bar, F&B), and claims history.

Here are starting ranges by coverage type for a small to mid-size limited-service hotel:

Cost estimates based on industry benchmarks and our own brokerage portfolio for small to mid-size limited-service hotels. Branded full-service hotels commonly run $50,000 to $200,000+ in total annual premium.

Factors that drive your cost up or down:

• Total Insured Value (TIV). The single biggest premium driver. A 60-room property valued at $8M will pay materially more than a 60-room property valued at $4M.
• Room count and services. Pools, full-service restaurants, and banquet operations all add premium.
• Building age, construction type, and sprinklers. A wood-frame, non-sprinklered build can be 2x to 4x the property premium of a fully sprinklered concrete-and-steel build of the same size.
• Location. Coastal Florida (named-storm exposure), Gulf states, California (wildfire, earthquake), and dense urban markets all rate higher.
• Claims history. Three to five years of loss runs is one of the first things underwriters request. A clean history typically saves 10 to 25%.
• Brand vs. independent. Branded hotels often qualify for franchisor-negotiated programs but also carry mandatory minimum schedules.
• Limits required by lender or franchisor. Higher mandated limits = higher premium.

Bundling and broker leverage typically save 10 to 20% versus buying coverages separately. These are starting ranges, not quotes. Your actual cost depends on your specific property, services, and loss history.

Hotel Insurance Requirements

Hotel insurance requirements come from four sources: state law, your franchisor, your lender, and your contracts. All four can apply at once, and a clean program reconciles them in a single schedule.

State law. Workers' compensation is mandatory for any non-owner employee in nearly every state, with Texas as the partial exception. Some states require liquor liability for licensure if alcohol is served. State innkeepers statutes don't require you to carry coverage but determine how much exposure you face for guest property if you don't.

Franchise and brand standards. Marriott, Hilton, Hyatt, IHG, Choice, and Wyndham each publish a minimum insurance schedule in their franchise agreements. Common requirements across brands include:

• Replacement-cost commercial property with agreed value
• General liability of $1M/$2M minimum (often higher for full-service or upper-upscale tiers)
• A commercial umbrella, frequently $5 million or more
• Liquor liability where alcohol is served
• Workers' compensation in line with state law
• Named insured and additional insured language for the franchisor and applicable affiliates
• Waiver of subrogation in favor of the franchisor
• TRIPRA (terrorism) coverage
• Specific deductible caps and notice provisions

The exact dollar minimums and named-party language vary by brand and tier and are detailed in your franchise agreement. We reconcile your policy schedule against the franchisor's exact requirements at every renewal.

Lender and mortgagee. CMBS hotel loans, SBA 7(a) and 504 hotel loans, and most regional bank construction loans require:

• Lender as loss payee and mortgagee on property
• Replacement-cost property
• Business interruption with an extended period of indemnity
• Deductible caps (often $25,000 or $50,000 maximum)
• Specific notice-of-cancellation language

Vendors, OTAs, and event clients. Wedding vendors, film crews, trade shows, and corporate group bookings commonly require named-additional-insured certificates. OTAs like Booking.com, Expedia, and Hotels.com are increasingly asking for indemnity and COI evidence for listed properties. (COI requirements primer → for the equivalent F&B logic.)

Hotel Insurance by Property Type

Small and Independent Hotels

Small hotel insurance for properties under 50 rooms, owner-operated, and usually single-location. Typical premium: $8,000 to $20,000 per year for a clean, sprinklered, no-pool property.

The most common gaps we see in independent small hotel programs:

• Property TIV under-reported to save premium, triggering coinsurance penalties at claim time
• No cyber coverage, despite full PCI-DSS exposure
• No innkeepers liability endorsement
• HNOA missing despite shuttle and airport-run operations
• Liquor liability missing for honor-bar or mini-bar alcohol sales

Boutique Hotels

Boutique hotels carry higher TIV per room (premium FF&E, design-led build-outs, often historic or repurposed buildings), heavier event programming, and a more brand-sensitive guest profile.

Underwriting focus areas:

• Replacement cost on historic or non-standard construction (a frequent gap)
• Event and banquet endorsements above standard GL limits
• Higher cyber sub-limits to match brand reputation risk
• Equipment breakdown for unique HVAC and audio-visual systems

Branded and Franchised Hotels

Marriott, Hilton, Hyatt, IHG, Choice, Wyndham, and other flagged hotels operate under brand-mandated insurance schedules. The broker's job is to reconcile the policy with the franchise schedule line by line: limits, named insureds, additional insureds, waiver of subrogation, TRIPRA, deductible caps, and notice provisions all have to match.

Brand-sponsored loss-control programs (BrandSafe, GuestSafe, and similar) are sometimes available to qualifying franchisees and can materially reduce GL premium.

Motels and Roadside Lodging

Motel insurance typically rates differently than hotel insurance because of exterior-corridor design, lower ADR, and historically different crime exposure. The coverage list is largely the same.

Bed & Breakfasts and Inns

Bed and breakfast insurance is a hybrid between residential and small commercial. Innkeepers liability is critical, and many B&Bs need a small-commercial property policy with a residential underlying form.

If your property also lists rooms on Airbnb, Vrbo, or Booking.com, you'll likely need Airbnb host insurance layered on top of, or in place of, traditional B&B coverage.

Hotel Insurance for Multi-Location Operators

Multi-property operators usually consolidate onto a single program with all locations scheduled. Key considerations:

• Schedule of locations with TIVs, room counts, services, and construction details for each property
• Blanket limits across the schedule for property and BI, which provides flexibility if a single property is over- or under-insured
• Per-location vs. per-occurrence deductibles for property and named-storm
• Additional insureds added per franchise and lender requirements at each property
• Captive options for portfolios over roughly ten properties, where the owner takes a share of the working layer in exchange for premium savings (advanced, brief mention here, deeper discussion at quote stage)

How to Get the Right Hotel Insurance

Not all hotel programs are equal, and how you buy matters as much as what you buy.

Going direct to a single carrier means you only see that carrier's products. If their pool sub-limit is too low, their bedbug exclusion is broad, or their terrorism rate is uncompetitive, you have nothing to compare against.

Working with a hospitality-specialized broker gives you access to multiple carriers and a critical reconciliation layer for franchise and lender requirements.

What to look for when evaluating a hotel insurance quote:

1. 1.
   Are pool, bar, banquets, spa, and gym specifically scheduled and rated? Generic "hotel" coverage at the wrong rate can deny pool or banquet claims.
2. 2.
   Is the property limit adequate for full replacement? A current insurance-to-value appraisal beats a guess.
3. 3.
   Does the period of indemnity for BI match how long it would actually take to rebuild? 12 months is rarely enough.
4. 4.
   Are franchise and lender requirements satisfied at the policy level (limits, additional insureds, waivers of subrogation, TRIPRA, deductible caps)?
5. 5.
   What's excluded? Mold, bedbugs, communicable disease, cyber sub-limits, named storm, flood, earthquake, vacancy. Read the exclusions section.
6. 6.
   Is innkeepers liability included or endorsed in? Most generic BOPs do not include it.
7. 7.
   Is liquor liability scheduled if you have a bar, restaurant, mini-bar, or banquets?
8. 8.
   Is HNOA included for employee airport runs and personal-vehicle business use?

Start your application →

Hotel Insurance State Guides

Hotel insurance requirements and rates vary significantly by state. Top markets we work with:

• Florida (named-storm exposure, separate hurricane deductibles, hotel insurance policies in Orlando and Miami)
• Texas (large hotel base, TX wind pool for coastal counties, opt-out workers' comp option)
• New York (innkeepers statute, urban GL, dense legal environment)
• California (earthquake DIC, wildfire, employee leave laws)
• Massachusetts
• Colorado
• North Carolina

State-specific guidance and underwriting rates are published per market. A state guide hub is in development.

Why Hotel Owners Choose Latent Insurance

Latent Insurance Services is an independent brokerage, which means we work in your interest rather than any carrier's. We compare options across 20+ carriers to find the combination that satisfies your franchisor's insurance schedule, your lender's requirements, and your actual operating risk at the most competitive price.

We specialize in lodging operations across the spectrum: independent and boutique hotels, branded and flagged properties, motels, B&Bs, and multi-property portfolios. We reconcile policy language line by line against brand and lender requirements at every renewal, so you don't get a "compliant on paper" program that fails at claim time.

Get a hotel insurance quote or schedule a call to walk through your specific coverage needs.

Frequently Asked Questions

What is hotel insurance?

Hotel insurance is a packaged commercial program that covers a lodging business's building, contents, employees, guests, and third-party liability. A typical hotel program bundles property, general liability, liquor liability, workers' compensation, cyber, business interruption, equipment breakdown, and umbrella into one renewal.

What does hotel insurance cover?

Hotel insurance covers physical damage to the hotel (fire, storm, water), liability for guest injuries (slips, pool incidents, food poisoning), liquor-related claims, employee injuries, lost revenue after a covered loss, cyber breaches and PCI fines, and equipment breakdowns. It typically excludes flood, earthquake, mold, bedbugs, and communicable disease unless specifically endorsed.

How much does hotel insurance cost?

A small to mid-size limited-service hotel typically pays $8,000 to $20,000 per year for a comprehensive package. Full-service and branded hotels can run $50,000 to $200,000 or more. The biggest cost drivers are total insured property value, room count, claims history, and whether the hotel has a pool, bar, or banquet operations.

What insurance do I need for a hotel?

Most hotels need: commercial property, general liability, liquor liability (if alcohol is served), workers' compensation, business interruption, cyber liability, equipment breakdown, and a commercial umbrella. Branded and CMBS-financed hotels almost always need TRIPRA, replacement-cost property, and additional-insured endorsements per franchise and lender requirements. (Detailed buyer's guide →)

Is hotel insurance required?

Workers' compensation is required by state law for any non-owner employee in nearly every state. Liquor liability is required for licensure in some states if alcohol is served. Beyond that, your franchisor (if branded) and lender will impose specific minimums, typically $1M/$2M GL, a $5 million or larger umbrella, and replacement-cost property.

Does hotel insurance cover bedbugs?

Usually not by default. Standard property and GL forms exclude infestations and contaminants. A few specialty carriers offer bedbug-specific endorsements covering remediation, room-quarantine income loss, and defense for guest claims.

Does hotel insurance cover guest property theft?

Only if the policy includes innkeepers liability. State innkeepers statutes typically cap the hotel's exposure (often $500 to $1,000 per guest) when proper notices are posted in rooms and at the front desk. The cap is voided if those notices are missing or non-compliant, leaving the hotel on the hook for the full loss.

What's the difference between hotel insurance and motel insurance?

The coverage list is largely the same, but carriers usually class motels separately because of exterior-corridor design, lower average daily rate, and historically different crime exposure, which results in different rating.

Do small hotels need cyber insurance?

Yes. Small hotels still process thousands of card transactions and store guest PII, which makes them subject to PCI-DSS and to state breach-notification laws. The 2018 Marriott breach started with a single Starwood reservation system; small chains and independents are common targets because their security stack is usually thinner.

How long does it take to get hotel insurance?

A quote typically takes 5 to 10 business days for a single property with clean loss runs and a complete submission. Branded and multi-location programs take 2 to 4 weeks. We can usually return an indication within 48 hours of receiving the submission package.

Does hotel insurance cover pool injuries?

Hotel general liability covers bodily injury to a guest in a swimming pool or pool deck, but the coverage often has sub-limits and specific exclusions for unattended-pool incidents. A commercial umbrella is what actually responds to a serious pool injury or drowning, where verdicts can run into seven and eight figures.

Do branded hotels need their own insurance, or does the franchise cover it?

Branded hotels need their own insurance. The franchise agreement specifies the minimum coverage you must carry, and the franchisor is named as additional insured, but the policy itself is yours. The franchisor's corporate insurance does not cover individual franchised properties.

Sources

• Connecticut Attorney General, $52 Million Multistate Settlement with Marriott (October 2024)
• UK Information Commissioner's Office, £18.4 million Marriott fine (October 2020)
• MGM Resorts International, SEC filings, Q3 2023 8-K
• New York General Business Law, §201 (innkeepers liability for guest property)
• California Civil Code, §1859 (innkeepers liability)
• Florida Statutes, §509.111 (lodging-establishment guest property)
• American Hotel & Lodging Association, State of the Industry reports
• PCI Security Standards Council, PCI-DSS resources

Last updated: April 30, 2026.

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