Key Coverages for NM Hotel Owners

NM hotel owners run the risk of facing lawsuits for damages and physical injuries, business disruption due to fire, and loss of income due to equipment breakdown. So, it’s essential to have some basic coverages.  Here are six policies you should have for your hospitality business.

Property Coverage

Business losses are expected in business regardless of industry. However, hotel owners suffer more devastating losses than other companies because of the required investment to run a hotel.

We are talking of millions, even for a small one. So, when a flood, fire, hurricane, or any disasters hit your hotel, paying for repairs can drain your working capital. Restoring operations can take a little longer than expected. Even worse, you might close the hotel for good.

Thus, it would help if you had insurance for your building and business. This business property insurance can cover for repair costs needed when disaster plagues your hotel. It can cover any business losses due to the disaster.

When you get this basic insurance, look at the inclusions and limitations. If you want a specific property coverage, discuss it with your insurance provider.

Equipment Breakdown

Guests want comfort and convenience when they check into your hotel. So, you need to maintain your commercial HVAC and keep it in pristine condition. An equipment breakdown, even for a few hours, will tarnish your hotel’s reputation and can result in income loss.

You wouldn’t want this to happen. To recover from this loss, get yourself insurance for this type of risk. The policy covers repairs for damages due to breakdown. It is different from the warranty of your HVAC system or any equipment for that matter.

Business Income and Expense

Let’s say your hotel is out of commission for a few months due to a fire. Of course, you need to rebuild the hotel building, buy new furniture, and install a new HVAC system. It would mean you have to pay for these expenses out of pocket. Moreover, you won’t earn an income during the rebuilding period.

But, if you have an insurance that covers loss of income and payment of expenses, you won’t have to spend so much on rebuilding. Some insurance policies will also include payroll expenses since you still have to keep critical employees during the rebuild period.

General Liability

Every day, you encounter various people with different personalities. If your hotel is prestigious, high-profile guests will check in with your hotel. Thus, there’s no room for negligence. Still, accidents happen, no matter how diligent you are.

When accidents happen, lawsuits come knocking at your door. Often, these lawsuits involve personal property damage or bodily injuries suffered by hotel guests. If these accidents or physical harm should happen on the hotel’s premises during business hours, you’ll be on the hook for damage.

With general liability insurance, you don’t have to worry yourself about such lawsuits, especially if you and your employees act in good faith. Your insurance provider will pay your benefits to defend you against these lawsuits, serious or trivial.

Worker’s Compensation

Hotel owners will always have employees, no matter how small the operation is. When a business has employees, laws require you to adopt a policy on worker’s compensation, and non-compliance may result in extensive fines or jail time.

This policy will protect you against employee lawsuits due to bodily injuries during working hours. The insurance provider will reimburse the costs you paid for medical expenses. Moreover, you will enjoy the standard law protection if you have worker’s compensation in place.

So, ask your insurance company to include it in your hospitality insurance. Take note also of the limitations of this policy.

Umbrella Liability

This insurance policy is additional coverage on top of your commercial general liability insurance. Some say it’s optional, but we say it’s essential.

Why? Because you offer services more than hospitality. You serve your hotel guests with food, liquor, and entertainment. More often, you have a bar and restaurant, a swimming pool, and a shuttle service.

With an umbrella liability policy, you’re extending your coverage beyond your current insurance. Remember, every insurance coverage has limitations. For anything not covered in the standard policy, you can include it in the umbrella liability.


Being a hotel owner comes with privilege because you get to meet many people, including high-profile personalities. However, it also entails so many risks, and you need to manage these risks accordingly.

You can reduce the damage to these risks by getting insurance, such as the Sante Fe Hospitality Insurance. If you want to know what coverages you need, call us, and we will discuss all the details.

About Daniels Insurance, Inc.

At Daniels Insurance, Inc., we have a unique understanding of the risks that businesses like yours face on a regular basis. With the backing of our comprehensive coverages and our dedication to customer service and quick claims resolution, your business will be fully protected. For more information, contact us today at (855) 565-7616.