Hospitality Insurance

With the end of the global COVID-19 pandemic finally in sight, the hospitality sector can once again open their doors to an increasing number of guests. But before rushing back into business as usual, you should take the time to reassess certain aspects of your business. Most importantly, you should ensure that you have the right insurance policy that will cover you and your business against industry-specific risks.

Today I’ll be sharing some insights about hospitality insurance that will hopefully help you in the future when making decisions about your own business coverage.

What Is Hospitality Insurance?

Hospitality insurance policies are designed to protect your business against certain risks, such as physical damage and financial loss. By insuring your business, you won’t need to shoulder risks on your own as your insurer will take on some of the risk. The types of businesses that fall under hospitality insurance include restaurants, hotels, live music venues, bars, and more.

Hospitality coverage generally includes, but is not limited to:

• property such as buildings, equipment, stock, and tenant improvements;
• loss of income from an insured peril such as a fire, water damage, vehicle impact, etc.; and
• liability exposure.

Waypoint has many hospitality markets it serves to whom it can provide options for all types of hospitality risks. For instance, the SHOP program targets high liquor establishments (this program is discussed in more depth later on).

Why Do You Really Need Hospitality Coverage?

The dangers inherent in serving food and alcohol to paying customers on-site and off-site, working with fire and water in large amounts every day, and having equipment that you absolutely cannot afford to break down before customers arrive are specific to the hospitality industry. That’s why I’d recommend that hospitality businesses consider taking out a hospitality insurance policy to protect themselves against liability and financial loss. The majority of losses in hospitality are insurable, but not every policy covers all types of losses. Hospitality insurance policies are not created equal, after all. Without the right type of insurance coverage, your business is still very much at risk.

One of the biggest risk exposures is not having the correct coverage or not having enough business interruption coverage. With so many options to choose from, combined with the unique insurance needs of your business, finding the perfect insurance fit can be more than a little tricky. In fact, it’s often frustrating and confusing.

Understandably, many opt for the quickest, easiest option. However, this approach is rarely in your best interest. Quick quotes online only work for cookie-cutter businesses, and let’s be honest, in 2022, there aren’t many left. Every company is trying to stand out and provide something new and exciting. One of the many examples where the old saying “You get what you pay for” rings true. A cheap online policy can lead to a massive uninsured loss.

Loss of income is one of the biggest exposures for businesses in hospitality. It is unfortunately very common for business owners to take out too little coverage to protect against this risk. Many insurers and business owners alike skip the tedious task of completing and analyzing documentation to speed up the process. For example, many individuals don’t realize that they are underinsured. Some insurance packages include a set limit of business interruption coverage such as $100,000 or $250,000. This may be adequate for some business owners. However, this limit may leave some owners significantly underinsured.

To mitigate this, at Waypoint Insurance, we recommend clients complete a business interruption worksheet documenting their current revenues and expenses, and those that will continue after a loss. This allows for a more accurate estimate of the coverage needed.

Waypoint SHOP Hospitality Insurance

Rates for hospitality risks have been rising over the last few years. This is partly due to an increased number of lawsuits and higher payouts. High liquor establishments have been hit the hardest with many not having any options for insurance.

I am proud to say that Waypoint is now offering a hospitality solution, developed by and exclusive to Navacord—the Select Hospitality Owner Program (SHOP).

The SHOP Hospitality Program was designed to fill the void in the market and provide a sustainable option. The value of good hospitality insurance, after the havoc caused by the COVID-19 pandemic, is priceless as many insurance providers don’t want to, or simple aren’t able to, provide appropriate insurance coverage.

The SHOP Hospitality Program provides wide coverage of hospitality risks for businesses in the hospitality sector, including:

• Adult Entertainment Venues
• Banquet Halls
• Bars
• Clubs
• Concerts
• Different Types of Restaurants (including family and fine dining restaurants)
• Live Music Venues
• Outdoor Events
• Private Liquor Stores
• Pubs
• Special Events

The hospitality coverage that we offer strives to continuously adapt and evolve with your business. The coverage that is included extends beyond what is usually offered by similar policies. It’s not just about protecting your physical assets from a fire.

There are other types of financial losses that owners should be aware of, including:

• cyber (ransomware, malware, etc.);
• lawsuits from slip/falls, allegedly overserving liquor, forcible ejection, etc.;
• government lockdown (covered in our SHOP program); and
• crime (for example, employee dishonesty).

Our policy also includes perks such as forcible ejection coverage, which, despite being one of the biggest risk exposures, is scarcely offered by insurance companies.

Why Waypoint Insurance?

With hospitality revenues down due to COVID-19 and insurance costs rising, it’s even more important to work with a broker that understands your business so you are protected and not paying for coverages you don’t need. The Waypoint Insurance team has been providing customized insurance policies for more than 150 years and have sold over one million insurance policies. Our knowledgeable team can help you get the cover you need by building you a personalized policy with our simple, seamless approach.

Getting the Best Out of Your Insurance

To reduce insurance costs, we recommend our clients focus on having complete training manuals and ensuring their staff are all familiar with the protocols. Mishaps happen and that is why insurance is important. However, many losses can be easily avoided with proper protocols in place and regular training.

Most importantly, it is absolutely critical to consult with an experienced insurance broker with knowledge of your business and the sector that it operates in. To be able to recommend the most appropriate coverage, your insurer needs to understand all parts of your business, including the risks inherent within your industry.

To learn more, call or email us, or complete the contact form on the Waypoint Insurance website and we’ll contact you.