How to Sell High-Limit Hotel Umbrella Insurance

This is an excerpt from our free “How to Sell Umbrella Insurance” eBook. Click here to download your copy.

For the most part, hotels recognize the importance of purchasing Hotel Umbrella insurance to supplement the liability limits in their underlying policies. In the last several years, however, liability claims have resulted in multi-million-dollar verdicts or settlements, underscoring the need for a high-limit umbrella policy.

Regardless of the type of operation, you’re insuring – from a resort to a full-service hotel, boutique, business-class, or midscale hotel – these liability claims arise from standard exposures such as slips and falls on flat surfaces, elevator injuries, bathtub falls, auto accidents, and other incidents. Be sure your clients realize the importance of having proper coverage to respond to today’s litigious environment.

Determining Your Client’s Umbrella Needs

Once you assess a hotel’s operational exposures, you can determine the Hotel Umbrella coverage and limits your client needs to get and remain risk-ready. Look to secure Hotel Umbrella insurance that offers:

  • Broad coverage with few restrictions or limitations
  • HNO/Owned Autos & Garagekeepers coverage
  • Broad Follow-Form coverage, including Follow-Form Legionella coverage for hotel locations
  • Crisis Response
  • Well-established carriers with acceptable A.M. Best ratings who will be there for the long-haul and will be able to handle a claim if one should arise

Claims Scenarios

Hotels face several hazards that could result in catastrophic losses and lawsuits against the operation alleging negligence. Following are several actual claims scenarios along with safety measures you can share with your clients to help mitigate risk and underscore the need for Umbrella insurance.

Sex Trafficking

According to the Human Trafficking Institute, as of 2020, more than 40 new cases were filed nationwide against hotels and motels under a federal law called the Trafficking Victims Protection Act, or TVPA. The TVPA states that hotel staff and employees can be held criminally liable, especially in the case of willfully disregarding the sex trafficking of minors. Hotel owners should be aware that a hotel, as a corporation, can be held vicariously liable for the actions of its employees even if the hotelier or management did not know that a criminal act was being conducted on the premises.

In 2020, for example, two women who claim they were victims of sex trafficking sued 22 Florida hotels for $100 million, alleging that the businesses didn’t do anything to stop the illegal activity. Reports in the papers said that “men cycled in and out of the women’s hotel rooms, and when housekeepers cleaned the rooms, they often found drug and sex paraphernalia.” The case is ongoing.

Download our free eBook to continue reading and see more claims scenarios.

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.

View a full list of our programs and submit business with Distinguished.

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