Hotel Insurance
Hotel insurance has to cover two businesses under one roof: a building full of people asleep in it, and a hospitality operation serving food, drink and functions to everybody else. The duties that attach to the first are the strictest in the trade, the income comes from four separate streams that recover at four different speeds, and a closure that leaves half the rooms open is the hardest claim in hospitality to settle. This page sets out what an accommodation programme has to carry, what the fire and food regimes actually require, and the questions worth settling before a kitchen fire closes the restaurant and the wedding suite together.
Two Businesses, One Roof
A hotel programme is assembled around the people sleeping in the building. Buildings or tenant’s improvements, contents, guests’ property, stock, money, employers’ liability, public and products liability, business interruption, equipment breakdown, deterioration of refrigerated stock and legal expenses. Hotel business insurance is usually quoted as a single package, and the sections that decide a claim are rarely the ones on its front page.
The building, and the duty that comes with sleeping accommodation. A hotel is not a shop with beds in it. Occupancy, escape arrangements and the condition of the building carry obligations no other hospitality trade has, and they drive the terms before the covers do. Hotel property insurance quoted without a room count and a fire assessment has been quoted on an assumption.
The liabilities, which include what your guests bring with them. Public liability for guests, visitors and contractors. Products liability for what you serve. Employers’ liability for staff, including casual, agency and function staff. And guests’ property liability, which is its own section with its own limit and is almost never the limit people assume.
Then the income, which is four streams rather than one. Rooms, food, beverage and events are collected separately for a reason: they recover at different speeds, they carry different seasonality, and events arrive with deposits already taken. Cancellation of a wedding is not automatically the same loss as hotel interruption, and a hotel is frequently still impaired long after the first rooms reopen.
Where this page stops. A wet-led pub, or anything turning on the premises licence, belongs on our pub and licensed trade page; a restaurant or bar without rooms belongs on our restaurant and bar page. Cyber matters wherever the booking engine, the card system or an outsourced reservation platform does.
Four Operations, Four Risks
Four accommodation businesses, and an insurer reads them as four different risks. The room count matters less than what else happens in the building, and a guest house and a country house with a wedding diary share little.
Operators running steady midweek occupancy on business travel, with a bar and a restaurant that mostly serve residents. The questions are the room count, the construction and the escape arrangements, how much of the trade is corporate business, and what a floor out of use for a month costs across the week.
Weddings and functions as a second business with its own diary, its own deposits and its own contracts. This is where cancellation and interruption get confused, because a wedding that cannot happen is a different loss from a hotel that cannot trade, and the couple’s contract and your policy rarely describe the same thing.
Fewer rooms, often an owner living on site, and a building that is frequently domestic in construction and commercial in use. Commercial hotel insurance written on a packaged basis can miss the mixed occupancy entirely, and the gap usually shows up as an argument about whether the property was a home or a business.
A pool, a spa, a gym or treatment rooms change the liability profile more than any number of extra bedrooms do. Supervision, water treatment, plant, qualifications and the contracts with any third party operating them all belong in the fact-find from the start, and none of it is implied by the word hotel on a schedule.
Most operators are two of these at once — a town hotel that has built a wedding trade, or a guest house that added treatment rooms. That is normal, and it is why the schedule so often describes the hotel that was bought rather than the one being run. The part added since is the part that turns out to be uninsured.
Duties, Not Products
No law requires you to buy a product called hotel insurance, and there is no universal requirement to hold a hotel or pub package. Employers’ liability is compulsory if you employ anyone and motor duties apply to vehicles used on a road. What compels the rest is a lease, a lender, a brand agreement, or a condition on the premises licence — its own regime, covered there along with Martyn’s Law.
Fire safety is the duty that defines accommodation, and it is stricter here than anywhere else in the trade. The Fire Safety Order applies to relevant premises in England and Wales, including sleeping accommodation, and responsible persons must address fire risks, precautions and evacuation. People asleep in a building cannot evacuate themselves on a warning they do not hear. Buying property insurance is not evidence of fire-safety compliance.
And prosecution does not require a fire. In the Bank Hotel case, London Fire Brigade reported that at Southwark Crown Court on 13 October 2022 Naveed Mir was fined £40,000 and ordered to pay £10,000 in costs, with custodial sentences suspended for two years and a £170 victim surcharge recorded. The breaches included fire precautions and continuing to operate contrary to a prohibition notice. The £50,000 figure in the authority’s article combined the fine and the costs — it was not a £50,000 fine.
Food safety applies wherever you serve. The Food Safety Act 1990, the relevant hygiene regulations and the Food Information Regulations 2014 impose duties on the business, with devolved differences, and official allergen guidance identifies criminal offences for failures in specified allergen labelling requirements. Our restaurant and bar page sets that out in detail, and it applies to a hotel kitchen in the same way.
And none of it is insurable the way people hope. Criminal fines are not insurable, and the cost of obeying a regulatory order is not insured loss. A prohibition notice closes the premises whatever the schedule says, and no policy authorises operating in breach of one. Some wordings fund defence costs, which is a separate question from the penalty and worth confirming.
The practical consequence is that the fire risk assessment, the room count and the insurance schedule need reading together, by somebody who has read all three. They almost never are, and on an accommodation account the distance between the building as assessed and the building as trading is where the argument starts.
Confirm, Do Not Assume
Four questions that decide whether an accommodation policy actually responds. Each has a written answer, and each is far cheaper to settle now than during a closure.
Confirm the guests’ property limit, per guest and in total, and what is excluded from it. It is a separate section from public liability, it is rarely as large as operators assume, and valuables, cash and items left in cars are commonly treated differently again. A coach party arriving at once is the test, not a single guest.
Collect the rooms, food, beverage and events income separately, then set the indemnity period against the slowest of the four to recover. A kitchen rebuild, a closed bedroom floor and a wedding diary run to completely different timescales, and twelve months is a default rather than a calculation anybody actually did.
Establish what the cancellation section triggers on and what it pays. Events arrive with deposits already taken and contracts signed, and a function that cannot go ahead is not automatically the same loss as the hotel being unable to trade. Confirm how rebooking, refunds and the couple’s own contract interact.
A hotel is rarely all open or all shut. Confirm how the policy treats partial closure — some rooms back in use while the kitchen, the events space or the leisure facility is not. That is the normal shape of a hotel claim and the one most likely to be argued, because turnover has resumed while the loss plainly has not ended.
Four written answers. Most of the accommodation policies we review can produce one, usually the indemnity period, because it was set at inception and never revisited. The guests’ property limit is almost never among them. Insurance for hotels is only ever as good as those four answers, and if yours produces all of them we will say so rather than inventing a reason to move it.
The Fact-Find
A hotel is not rated on turnover. Hotel liability insurance and the property sections are priced on the building, the fire duties and the occupancy.
The building, its age and construction, listed status, the room count and the maximum occupancy, the layout and the escape routes, and whether any part of it is residential or owner-occupied. Outbuildings, annexes and anything let out separately. Flood exposure, and what the building was used for before it was a hotel.
Detection and alarm coverage, emergency lighting and compartmentation, the fire risk assessment and when it was last reviewed, who the named responsible person is, and how evacuation works for guests who are asleep and for anyone who could not use the stairs. Send us the assessment itself, not a summary of it.
Kitchen extraction and its cleaning record, the bars and cellars, and whether there is a pool, spa, gym or treatment rooms — and who actually operates them. The events diary, marquees, outside caterers and any third party trading on your site. Each of these is rated separately, and none is implied by the room count.
Annual and seasonal occupancy and how much the two differ, the income split across rooms, food, beverage and events, how much cash is held overnight, the booking engine and card systems and any outsourced reservation platform the business depends on, and claims history including anything that happened under a previous owner.
The change that matters most and gets reported least is a change to what the building does. A wing is refurbished, a marquee becomes a summer fixture, a spa opens, rooms are taken out of use for a season, or the business moves from owner-operated to a management company. None of those feels like an insurance event and every one of them changes the risk — which is why an accommodation account needs a call when something changes rather than a conversation once a year. Renewal is the worst possible moment to find out.
Named People, Not a Call Centre
Choosing a hotel insurance broker comes down to who asks about the building and the fire assessment before they ask about price. Four people, and you deal with them directly rather than through an account team.
Ian Cooke has thirty-four years in the industry, leads our internal team and the day-to-day running of the business, and leads on compliance. A hotel account tends to start with him because the first questions are about the building and its duties rather than about price. Ian Snowdon is a commercial account executive looking after clients across farming, manufacturing and professional services, and brings the habit those accounts demand — reading the schedule against what the business actually does.
Jody Sutherland has over eighteen years in insurance and provides Ian Snowdon’s internal support, so the mid-term changes an accommodation account generates — a wing closed for refurbishment, a spa opening, rooms out of use for a season — go to somebody who knows the file. Colin Thompson is our Claims Manager with over eighteen years in the role, and a hotel claim is rarely one claim: damage, lost rooms, cancelled functions and a kitchen that cannot reopen on the same timetable. Claims are handled in house from notification onwards, and the rest of the team is on our team page.
Hotel Insurance Enquiry
Park is an independent commercial insurance broker in Durham, arranging hotel insurance UK-wide for operators of hotels, country houses and guest accommodation. Six questions and an optional upload. The two most useful documents are your current schedule and the fire risk assessment, because between them they answer most of what an insurer will ask about the building. A hotel insurance quote produced without either is produced on an assumption. One working day, no fee and no obligation either way.
Common Questions
A package rather than a single cover: buildings or tenant’s improvements, contents, guests’ property, stock and money, public and products liability, employers’ liability, business interruption, equipment breakdown, deterioration of refrigerated stock and legal expenses, with cancellation and loss-of-licence sections carrying triggers of their own. What you need, and at what level, depends on the room count, what else is on site, and how much of the income comes from events rather than from beds.
Not as a product, and no package is compulsory. Employers’ liability is compulsory if you employ anyone, and motor duties apply to vehicles used on a road. Everything else is driven by a lease, a lender, a brand or franchise agreement, or a licence condition. Separately, the fire-safety, food-safety and licensing regimes impose duties on the business whether or not you are insured, and insurance does not discharge a single one of them.
Potentially, and it is a separate section from public liability with a limit of its own — usually both per guest and in total. It is rarely as large as operators expect, and valuables, money and property left in vehicles are often treated differently again. The time to check the figure is before a coach party arrives, not after a theft. Confirm the limit, the exclusions and what your own terms of booking say, because the two need to agree.
It is what the terms are built on. The Fire Safety Order applies to relevant premises in England and Wales including sleeping accommodation, and responsible persons must address fire risks, precautions and evacuation. An insurer rates an accommodation risk on detection, escape and the assessment behind them. It is worth saying plainly that buying property insurance is not evidence of fire-safety compliance, and a policy does not discharge the duty.
Yes. In the Bank Hotel case, London Fire Brigade reported that at Southwark Crown Court in October 2022 Naveed Mir was fined £40,000 with £10,000 in costs, custodial sentences suspended for two years and a £170 victim surcharge, for breaches including fire precautions and continuing to operate contrary to a prohibition notice. The £50,000 figure quoted in the authority’s article combined the fine and the costs. A prohibition notice closes premises whatever a policy says.
Usually not the same one, and this is the distinction that causes the most argument. Interruption responds to the hotel being unable to trade; cancellation responds to the event not going ahead. They have different triggers and they pay different things, and the couple’s contract with you is a third document that rarely matches either. Deposits already taken and the practicalities of rebooking need settling in advance rather than in the middle of it.
No, and partial reopening is the normal shape of a hotel claim rather than the exception. Rooms can come back into use while the kitchen, the events space or the leisure facility cannot, and turnover resumes while the loss plainly continues. Confirm in advance how the wording treats an impaired trading period, because that is the point at which an insurer and an operator most often disagree about when the claim actually ended.
Yes. Send your current schedule and, if you have it, the fire risk assessment, and we will tell you whether the guests’ property limit is realistic, whether the indemnity period matches the slowest of your four income streams to recover, how the wording treats partial closure and cancelled events, and whether anything is being paid for twice. If it is correctly arranged we will say so, and there is no fee either way.
