Hotels, restaurants, resorts, and other hospitality venues often operate in high-traffic areas, which means when violence, civil unrest, or an active threat event occurs nearby, they’re directly in the line of impact. But when those events happen, standard commercial property policies don’t always respond the way clients expect, leaving businesses facing months of lost income and repair costs with little recourse.
Crisis management insurance is designed to fill the gaps left by standard policies, covering the losses, expenses, and interruptions that follow a crisis event. This includes property damage, lost income from business interruption, costs incurred when authorities restrict access to a venue, and ongoing revenue losses when an event damages a location’s reputation.
Distinguished’s Crisis Management Insurance Program is designed to provide coverage for the unique risks hospitality businesses face around violence, civil unrest, and active threat events. This guide covers what Distinguished’s crisis management insurance covers, who needs it, and how to get started, so you can offer your hospitality clients the complete protection they deserve.
Why Hotels and Hospitality Businesses Face Unique Risks
Hospitality businesses like hotels, conference centers, and entertainment venues depend on public sentiment for viability and growth. But because these venues attract large groups, they can be potential targets for political violence, terrorist attacks, or lone actors.
Even if your client’s venue isn’t directly targeted, just being in the area of a disruptive or violent event can impact their business. Unrest or violence may make people less willing to visit affected areas and venues. Hesitance can persist long after an event ends, leading to decreased foot traffic, fewer bookings, and loss of income.
If an event escalates, it can result in extensive property damage and personal injury that could take months or years to recover from. Reputational damage may linger even longer, particularly when events receive extensive news coverage that brings a sense of danger or notoriety to an area.
Why Do Hotels Need Crisis Management Insurance?
Your hospitality clients can’t foresee or plan for every possible incident, and their regular commercial property insurance may not have all of the coverages they’ll need in a crisis. For example, it’s common to find policy exclusions for firearms-related incidents or assault and battery. These exclusions leave significant coverage gaps for hotels.
After an incident, a hotel may also face:
- Lengthy time spent on post-incident management, like cooperating with related investigations, communicating with media, and arranging for cleanup and repairs, during which the business brings in little or no revenue
- Lower operating capacity while road access is restored, facilities are repaired or rebuilt, or employees receive medical care or trauma counseling
- Travel restrictions due to heightened threat levels, leading to reduced foot traffic or fewer bookings
- Loss of reputation that requires a significant investment in security and marketing to regain the public’s trust
Your hospitality clients need to be prepared to manage and mitigate these impacts. A flexible insurance solution like the Crisis Management Insurance Program from Distinguished provides coverage that evolves alongside emerging threats to give your clients comprehensive protection and support.
What Hospitality Businesses Need Crisis Management Insurance?
Any high-volume hospitality business should consider a crisis management policy. Venues in popular tourist destinations or busy areas like downtown districts are particularly exposed, especially those that regularly host large events, conferences, or public gatherings.
These venues may include:
- Hotels and inns
- Resorts
- Conference centers
- Restaurants
- Stadiums
- Casinos
If your clients operate any of these venues, Distinguished’s Crisis Management Insurance Program has coverage options worth considering.
What Does Distinguished’s Crisis Management Insurance Cover?
Crisis management insurance from Distinguished offers three insurance options to cover the unique risks your hospitality clients face. Each policy includes optional add-ons so you can tailor coverage to meet your clients’ needs.
Sabotage, Terrorism, and Violent Acts Insurance (Paladin)
Paladin provides market-leading coverage tailored to counter the growing threat of sabotage and terrorism across the U.S. By combining sabotage, terrorism, and active assailant insurance into a single solution, Paladin gives at-risk venues like hotels, resorts, and convention centers comprehensive protection for multiple scenarios.
Key coverages include:
- Broad definition of sabotage and terrorism that includes lone actors
- Coverage for certified and non-certified acts
- Help from experts in political violence threat and risk analysis
- Selective portfolio that allows you to choose coverage types and limits
- Coverage for non-damage denial of access
- Ongoing loss of attraction coverage
- No deductible regardless of the underlying property policy
- Active shooter coverage as standard, not an add-on
Optional coverages:
- Active assailant coverage, including liability
- Increased cost of working
- Strikes, riots, and civil commotion
Strikes, Riots, and Civil Commotion Insurance (Shield)
Shield covers the gaps in standard commercial property insurance with a unified strikes, riots, and civil commotion (SRCC) policy that includes coverage for property damage and business interruption.
Key coverages include:
- Broad definition of strikes, riots, and civil commotion that includes malicious damages sparked by unrest
- Extra expense for costs that exceed normal operating expenses during repair and restoration
- Losses related to a listed political or social peril
- Denial of access if authorities deem operations have to stop wholly or partially
- Low deductible no matter your client’s underlying property policy
- Access to expert help in political violence threat and risk analysis
Optional coverage:
- Active assailant with liability coverage
Active Assailant and Deadly Weapons Insurance (Halo)
Halo combines prevention tools and post-incident support for active assailant and deadly weapons incidents.
Key coverages include:
- Primary liability for lawsuits related to bodily injury from either an active assailant or deadly weapons attack
- Up to $20 million of coverage per location
- Property damage and business interruption coverage up to policy limits
- Accidental death and dismemberment sublimit of $50,000 per person
- Medical expenses sublimit of $25,000
- Coverage against the threat of a deadly weapon attack with unlimited crisis management fees
- Comprehensive coverage for a wide variety of weapons, including handheld devices and road vehicles used in attacks
- Certified and non-certified acts covered
- A selective portfolio that allows you to choose coverage types and limits
Optional coverages:
- Post-underwriting review
- Action plan webinar
Examples Where Hospitality Businesses Needed Crisis Management Coverage
Increasing violence and unrest can directly affect hospitality businesses. Here are a few hypothetical examples of where crisis management insurance could help your clients:
- A riot breaks out down the street from a hotel your client owns. Protestors block the streets, throw objects, and break windows, and the police are called to manage the unrest. Your client experiences several months of decreased bookings and foot traffic due to the event, and the cost of repairs has a further impact on revenue.
- A lone assailant disrupts a dinner that a politically affiliated group holds at your client’s restaurant and attempts to harm several guests. The attack is unsuccessful, but the event impacts your client’s reputation, leading to lost business for the remainder of the year.
- A series of protests occurs in a city where your client owns a popular resort, spa, and restaurant. New bookings decrease along with tourist traffic, leading to a loss of income.
Crisis management insurance covers damages, expenses, and interruptions both during and after such events. Without it, businesses can face hundreds of thousands, or even millions, in collective damage and loss.
Benefits of Partnering With Distinguished for Crisis Management Insurance
With nearly four decades of experience, Distinguished helps you serve hospitality clients with comprehensive, flexible programs and expert support that address the specific risks and vulnerabilities of their industry.
When you work with Distinguished, you get the benefit of:
- High coverage limits: Clients have access to up to $150 million in coverage, making the Crisis Management Program suitable for large, high-volume businesses.
- Responsive service: Fast, reliable help in the event of a crisis so your clients can get back in business sooner.
- Innovative, customizable plans: Choose the coverage types, add-ons, and limits that best serve your clients so each business has exactly what they need for their unique needs. You’re free to adapt coverage as the threat landscape changes or your client’s business grows.
- Non-certified incident coverage beyond TRIA: Coverage under the Terrorism Risk Insurance Act (TRIA) is restricted to events that the government recognizes as terrorism, and limitations are subject to change. But coverage from Distinguished includes incidents that TRIA may not certify, so your clients aren’t left without protection.
- Multi-industry experience: Experts who understand the hospitality industry know how to underwrite policies so nothing important is missed.
- Convenient broker portal access: Submit a claim, quote a client, or bind a policy any time through Distinguished’s online self-service Broker Connect portal for Paladin coverage.
Every Distinguished policy is backed by Lloyd’s, an AM Best-rated A+ carrier, to ensure your clients are covered even during events that result in high claim volumes.
How to Get Started With Distinguished’s Crisis Management Insurance Program
To offer the Crisis Management Insurance Program to your hospitality clients, simply register as a broker with Distinguished. Once you’re registered, you can submit a business for Paladin coverage through the Broker Connect portal. For Shield or Halo coverage, send risk details to [email protected].
Want to learn more about the Crisis Management Program? Visit our resource page for additional details.
FAQs
Can different types of crisis management insurance be purchased together?
Yes, you can add coverage for multiple crisis types to any policy. For example, active assailant coverage is available as an optional add-on with Paladin.
Does Distinguished offer crisis management coverage across the United States?
Yes, you can access the Crisis Management Program for clients nationwide.
What makes crisis management insurance from Distinguished different?
Distinguished is staffed by experts in political violence threat and risk analysis coverage who bring their specialized insights to each case and claim. Plus, every crisis management policy from Distinguished is backed by Lloyd’s, an AM Best-rated A+ carrier.
