The Case for Higher-Limit Hotel Umbrella Insurance

Hotels, for the most part, understand the need to purchase Commercial Umbrella insurance to extend the liability limits in their underlying policies such as General Liability. But what is key to driving home is the need for high-limit Hotel Umbrella insurance. It is critical in today’s litigious environment where nuclear verdicts and settlements are commonplace.

The following are among the top five liability claims against hotels in the last few years in which hotel insurance companies had to pay millions in verdicts or settlements. These lawsuits underscore the importance of having the right coverage in place. It also ensures that the policy liability limits truly reflect a hotel’s complete exposure. Scroll down to learn more about the importance of hotel insurance.

1. Sexual Assault

Last year, a woman was awarded tens of millions of dollars in a sexual assault case at a Houston-based hotel. The jury found that the hotel’s negligence played a significant role in the March 2017 incident. The hotel personnel placed an unconscious and vulnerable guest in the wrong room, which led to the assault. Jurors in the trial watched hotel video showing the intoxicated woman being ushered by hotel security and the police into the assailant’s room even though she had identification in her purse and was, in fact, a guest with a room registered in her name. The security staff also failed to question the assailant’s claim that “she’s with me.” The woman awoke to be sexually assaulted in the early morning hours. The multimillion-dollar verdict was for medical expenses, lost earnings, and mental anguish after the assault, with the jury assigning 90% of the responsibility to the hotel.

2. Security Negligence

A man was awarded millions of dollars in a negligent security settlement after he was injured during a robbery and assault incident at a Texas-based hotel.

3. Slip and Fall

A former Paralympian skier who previously won three gold medals skiing with a team using a prosthetic leg was a guest at a New Hampshire hotel when she stepped out of an elevator and slipped on a freshly mopped floor. She tripped and fell, landing on her right knee. Although she didn’t break any bones, she sustained permanent cartilage damage in her right knee, necessitating three surgeries. She is no longer able to ski standing up and is attempting to learn “sit-skiing.” The hotel reached an agreement for several millions of dollars.

4. Legionella

A guest was celebrating her 40th wedding anniversary with her husband at a Las Vegas hotel when she inhaled Legionella bacteria while using the hotel’s jacuzzi. She was hospitalized shortly after and died only a week later. During discovery, it was determined the hotel was not only directly responsible for the woman’s death, but it was also aware of Legionella being present in its water system months before the victim’s stay. The victim’s family was awarded a multi-million-dollar settlement.

5. Carbon Monoxide Poisoning

An incident recently made headline news when a man and woman were found dead in their room. Initial investigations suggested that the deaths were a result of high carbon monoxide. This prompted the fire department to conduct a test. Once the leak was confirmed, guests were then evacuated. One of the evacuated guests was taken to a hospital because he was exhibiting symptoms of exposure to carbon monoxide. Litigation against the hotel is highly likely.

Justifying Higher-Limit Hotel Umbrella Insurance

These and other cases show the extent of exposures hotels face and the high cost of litigation and ultimate settlements and verdicts, even if the establishment is not deemed to be responsible for an accident or loss. Having high-limit Umbrella insurance is critical in helping to pay for:

  • high legal fees,
  • protracted litigation, and
  • the potential for a multimillion-dollar judgment or settlement.

Distinguished Programs offers Hotel Umbrella insurance with limits up to $170 million. Coverage is available for luxury, full-service, boutique and condo-tels, select-service, business class, and midscale hotels.


About Distinguished Programs
Distinguished Programs is a leading national insurance Program Manager providing specialized insurance programs to brokers and agents with specific expertise in Real Estate, Community Associations, Hotels, and Restaurants. Property and liability products are distributed through a national network of agents and brokers. Serving the same core markets and partnering with the most stable and reputable carriers, Distinguished Programs’ high-limit umbrella programs remain the clear choice in its areas of specialty for superior coverage, competitive pricing, and attentive service. Through thoughtful innovation, stemming back to 1995, Distinguished Programs fosters growth and opportunities for its brokers, carriers, and employees.

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