Does Your B.C. Hotel Insurance Minimize Risk?

May 5, 2025

Does your B.C. hotel have a risk management strategy to prevent any lawsuits as a result of an accident or mishap involving a guest, supplier, or member of the public?

You should identify any potential liability problems and choose hotel insurance that minimizes any risks.

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Business liability insurance you need in your B.C. hotel insurance package:

Commercial general liability (CGL) insurance

CGL insurance is the building block of your B.C. hotel insurance package.

If your hotel were sued, commercial general liability insurance would cover the legal costs to defend the claim in court, as well as costs to cover damages to compensate third parties (guest, supplier, member of the public).

What types of risks does CGL insurance cover?

• Injury to another person who is not your employee
• Damage to someone’s property, damage to rented property.
• Medical bills if someone is injured
• Legal and settlement costs of liability lawsuits filed against you.
• Helps over the costs of liability lawsuits related to slander and libel

Cyber liability insurance

If your British Columbia hotel keeps financial information belonging to your guests, your computer system could be hacked by cyberthieves. Cyber liability insurance will help protect your hotel in the event of a cyber-attack.

Depending on the size of the data breach and the information that was taken, the customers who are affected can hold you liable and sue you for damages.

Did you know? Cyber-attacks are a fast-growing threat to businesses.

Liquor liability insurance

If your B.C hotel offers alcoholic beverages with room service, in a mini fridge, at a bar, or if your hotel restaurant serves drinks, you will need this type of coverage. Liquor liability insurance protects you against any property damage or injuries caused by an intoxicated guest or customer.

Commercial umbrella insurance

Commercial umbrella insurance addresses coverage gaps in business liability insurance. It’s used when the primary liability coverage, for example on your commercial general liability insurance, has reached its coverage limit.

The protection that umbrella insurance provides applies only to expenses related to liability such as legal fees, court fees, and legal settlements.

What other types of coverage are in a B.C. hotel insurance package?

Equipment breakdown insurance

If there’s a power outage, air conditioning or heating failure, or appliance breakdown, it can lead to property damage and possible business interruption at your hotel.

Equipment breakdown insurance provides coverage for property damage from the sudden and accidental breakdown of insured equipment that’s not automatically covered by a standard commercial property policy. This type of insurance covers property damage, business interruption when it’s included in your policy, and spoiled inventory or contents when specified kinds of mechanical, electrical and pressure equipment are damaged, including power surges.

You can insure nearly everything that is mechanical, electrical, and electronic due to breakdown. This includes boilers, air conditioning and refrigeration units, electrical panels, computers and security, and telephone systems.

Commercial crime insurance

Employees, guests, suppliers, and even members of the public have the opportunity to steal from your British Columbia hotel. If one of your guests is a victim of theft, your hotel could be held responsible for the loss.

Crime insurance helps protect you against losses that are not covered by a standard commercial property policy, such as employee theft, credit, debit or automated teller, counterfeit money, or loss of money at your B.C. hotel.

Commercial property insurance

Commercial property insurance can provide financial coverage for physical loss, such as a fire, or damage to your hotel and its contents. It also protects the building and provides coverage for your equipment, inventory, furniture, computers, and other electronics.

Business interruption insurance

Business interruption service is necessary for your hotel. It supports you when your hotel can’t operate due to a covered loss, such as a fire. Business interruption insurance is typically purchased as an add-on or endorsement to a standard commercial property insurance policy, rather than a standalone policy.

There are a number of losses that could force your business to temporarily close:

• Damage to your equipment from fire or vandalism
• A major reduction in revenue due to a client/supplier facing losses of their own
• A disruption in your supply chain

It can help with these expenses:

• Payroll
• Rent
• Utilities
• Property taxes
• Alarm monitoring
• Relocation of your business

Commercial auto insurance

Your personal car insurance doesn’t cover your hotel business vehicle(s).

Commercial auto insurance will cover damage to your business vehicle if you or one of your employees gets injured in an accident and your liability to others. It also provides replacement car coverage if you need to rent a temporary car for your hotel/motel business after a covered accident.

Add sewer backup insurance and overland flood insurance to your B.C. hotel insurance package

Heavy rainfall, melting snow, and storms can overwhelm drainage systems, leading to sewer backups and overland flooding. If your B.C. hotel is located in a flood-prone or an area with aging infrastructure, it could be at risk for sewer backup or overland flooding.

In Canada, most standard commercial property insurance policies do not automatically cover sewer backup and overland flooding. Make sure that your B.C. hotel is protected.

Final thoughts

Business insurance for your B.C. hotel can minimize risk by having the right liability coverage and commercial business coverage in place.