Hotels & Resorts: Knowing Your Rights When Confronted with an Insurance Loss

Hotel and Resort owners face many unique challenges in operating a successful business.  Along with the pressures to cater to clients 24/7 , owners face complex regulator environments and profit margins that get smaller with continued brand mandates from the franchisor.  On top of all of this, the weight of change from a recent global pandemic has been no small feat.

While we don’t claim to be experts in the hospitality field, we do understand the challenges that may arise when dealing with property damage like fires, vandalism, hail or wind.  Because hotel businesses are always open and hosting people, building components get constant use and abuse. A challenge owners should not have to face is submitting an insurance claim and having that loss not covered by the carrier. Unfortunately, that is not always the case.

An insurance carrier may undervalue the cost of the repairs or the scope of the damage.  Or worse, argue that there is no coverage for a given loss.  Hotel owners often go to great lengths to have damage mitigated as quickly as possible, only to find later that those costs are now challenged by the carrier.  This can results in an extremely difficult situation.  The operator must make repairs to continue to operate, incurring substantial remediation costs.  When these costs are not reimbursed by the carrier in a timely manner, or worse, not reimbursed at all, the hotel may find itself in a difficult financial situation.

If you are a hotel owner or operator and your property suffers an insurance loss, it is wise contact legal counsel familiar with insurance law to ensure that the hotel is receiving the full scope and amount of coverage it is entitled to under its insurance policy.  This allows the hotel to focus on what is really important, the guests and business.  Our firm has extensive experience helping business owners and operators navigate large insurance losses.  We often see situations where the carrier offers less than what is covered under the policy or does not properly value the cost of the necessary repairs.  When considering the cost of repairs to a commercial building, these amounts can be considerable and therefore necessary to recover.

If you are a hotel owner or operator who has suffered an insurance loss and would like help understanding the coverage and rights afforded under the policy, please contact us.  The earlier we can get involved, the more quickly we can resolve your claim.