Quick Answer: Hotel insurance is a package of commercial coverages built for lodging businesses. Most hotels and motels carry commercial property, general liability, business income, workers compensation, and an umbrella policy, then add liquor liability, innkeepers legal liability, cyber liability, and commercial auto to fit the property. Cost depends on the building, the amenities, payroll, and claims history.
What Hotel Insurance Covers
Commercial Property
Helps protect the building, furnishings, fixtures, signage, and equipment against covered causes of loss such as fire, wind, and vandalism.
General Liability
Helps address claims that a guest or visitor was injured or had property damaged on the premises, such as a fall in the lobby, at the pool, or in the parking lot.
Business Income
Designed to help replace lost room revenue and cover continuing expenses when a covered loss closes rooms or the whole property during repairs.
Liquor Liability
Helps address claims that arise from serving alcohol at a bar, restaurant, banquet, or through room service. It is usually written as its own coverage.
Workers Compensation
Pays for medical care and part of lost wages when an employee is hurt on the job, from housekeeping and maintenance to the front desk and kitchen.
Innkeepers Legal Liability
Helps address claims for guest belongings lost, stolen, or damaged while in a room, a safe, or held by the hotel.
Cyber Liability
Helps with the cost of responding to a data breach involving reservation records and payment card information.
Employment Practices Liability
Helps address claims from employees alleging wrongful termination, discrimination, or harassment.
Commercial Umbrella
Adds liability limits above the underlying general liability, auto, and employers liability policies once those limits are used up.
Often added: commercial auto for shuttles, hired and non-owned auto for staff errands, crime coverage for employee theft, and equipment breakdown for boilers, elevators, HVAC, and kitchen equipment.
Why Every Hotel and Motel Owner Needs It
A hotel combines several businesses under one roof. It is a building full of sleeping guests, often a commercial kitchen, sometimes a bar, a pool, a parking lot, and a workforce on every shift. Each of those brings its own kind of claim.
Fire is the clearest example. According to the U.S. Fire Administration, an estimated 3,900 hotel and motel fires were reported to U.S. fire departments each year from 2014 to 2016, causing an estimated 15 deaths, 100 injuries, and $100 million in property loss. Cooking was the leading cause.
Commercial property insurance pays to repair the building. It does not replace the room revenue lost while a wing is closed, which is the job of business income coverage. A hotel with a mortgage and payroll usually needs both.
Liability works the same way. General liability responds when a guest is hurt on the property. If the hotel serves alcohol, liquor liability is written separately, and an on-site restaurant or lounge carries the same exposures we cover in our restaurant insurance and bar insurance programs.
Employees are the other half. Housekeeping, maintenance, and kitchen work produce injuries, which is why workers compensation sits in nearly every hotel program. Lenders and franchise agreements commonly set their own limits and ask for a certificate of insurance as proof.
Looking for a hotel "master policy"?
In insurance, a master policy is what a condo or homeowners association buys to cover shared property. A hotel is an operating business, so it is insured with a commercial package instead. If you manage an association, see our guide to the HOA master insurance policy.
Hotel Insurance in Illinois: Three Rules to Know
We place hotel coverage nationwide. For Illinois properties, three state rules shape the program.
| Illinois rule | What it means for a hotel | Source |
|---|---|---|
| Workers compensation | Illinois requires employers to provide workers compensation insurance for almost everyone who is hired, injured, or whose employment is localized in the state. One part-time employee is enough to trigger the requirement. | Illinois Workers' Compensation Commission |
| Dram Shop Act 235 ILCS 5/6-21 |
A person injured by an intoxicated person can bring a claim against the licensed business whose alcohol caused the intoxication. For final judgments or settlements awarded on or after January 20, 2026, recovery is capped at $90,411.55 for each person for injury to person or property, and $110,503.00 for loss of means of support or loss of society. The limits adjust every January 20. | Illinois Liquor Control Commission |
| Innkeeper Protection Act 740 ILCS 90 |
A hotel that provides a safe and posts notice of it in at least 10 conspicuous places limits its liability for guest valuables: no more than $250 if the guest does not use the safe, and no more than $500 if the guest does, unless the hotel agrees in writing to more. | Illinois General Assembly |
This is a summary for insurance planning, not legal advice. Dram shop limits are for 2026 and change each January.
What Hotel Insurance Costs
No two hotels price the same. A 40-room exterior-corridor motel and a 200-room full-service hotel with a bar are different risks, and carriers rate them differently.
| Property type | What drives the premium | Coverages that matter most |
|---|---|---|
| Economy or limited-service motel | Age of the building, wiring, and roof. Exterior corridors, fire protection, and parking lot security. | Property, general liability, crime |
| Select-service or franchise hotel | Building value, sprinklers and alarms, pool and fitness areas, and the limits the brand and lender require. | Property, business income, umbrella |
| Full-service hotel with restaurant, bar, or events | Liquor and food sales, a larger payroll, banquet space, and shuttle or valet operations. | Liquor liability, workers compensation, commercial auto |
| Boutique or historic property | Cost to rebuild older or custom construction, and how recently the electrical, plumbing, and roof were updated. | Property with ordinance or law coverage, business income |
| Bed and breakfast or small inn | Whether the owner lives on site, the number of guest rooms, and food service. | A business owners policy may fit, depending on the carrier |
We do not publish a single price for hotels because it would mislead more owners than it helped. Your exact premium depends on building values, revenue, payroll, limits, and loss history, and is confirmed by a producer.
What we need to quote your hotel
Underwriters ask for the same items on every lodging account. Having them ready shortens the process.
- Number of rooms, stories, and buildings
- Year built, construction type, and the years the roof, wiring, plumbing, and HVAC were last updated
- Sprinklers, alarms, and whether corridors are interior or exterior
- Annual revenue, split by rooms, food, and liquor
- Payroll by job type
- Amenities: pool, fitness room, restaurant or bar, event space, shuttle, valet
- Three to five years of loss runs
- Franchise agreement and lender insurance requirements
- Current declarations pages
What Our Clients Say
Why Hotel Owners Choose Pro Insurance Group
An Agency, Not a Carrier
We are an independent agency. We work for the property owner and shop the market on your behalf.
We Shop 20+ Carriers
We compare the market for lodging risks instead of quoting one company's rate.
$0 Broker Fees
We are paid by the carrier. Hotel owners do not pay us a broker fee.
40+ States
Licensed to place coverage for single properties and multi-location owners nationwide.
Own other property types? We also place short-term rental insurance for hosts and habitational insurance for apartment owners.
Hotel Insurance FAQ
What insurance does a hotel need?
Most hotels carry commercial property, general liability, business income, workers compensation, and an umbrella policy. Liquor liability, innkeepers legal liability, cyber liability, employment practices liability, and commercial auto are added based on the property's amenities and operations. The right mix depends on the building, the services offered, and what a lender or franchise agreement requires.
How much does hotel insurance cost?
There is no standard price for hotel insurance because properties differ too much. The premium depends on the building's replacement cost, age, and fire protection, annual revenue, payroll, amenities such as a pool or bar, the limits chosen, and claims history. A producer confirms the exact premium during quoting.
Is motel insurance different from hotel insurance?
The coverages are the same. What changes is the pricing and the questions an underwriter asks. Motels often have exterior corridors, older buildings, and smaller staffs, so carriers look closely at building updates, fire protection, and security. Full-service hotels add liquor, food service, and event exposures.
Does a hotel need liquor liability insurance?
If the property sells or serves alcohol, liquor liability is the coverage built for those claims. General liability policies commonly exclude liquor claims for businesses that sell or serve alcohol. In Illinois, the Dram Shop Act lets a person injured by an intoxicated person bring a claim against the licensed business whose alcohol caused the intoxication.
Is a hotel responsible for a guest's stolen property in Illinois?
Illinois limits that responsibility. Under the Innkeeper Protection Act, a hotel that provides a safe and posts notice of it in at least 10 conspicuous places is liable for no more than $250 for valuables a guest does not put in the safe, and no more than $500 for valuables the guest does deposit, unless the hotel agrees in writing to more.
Is workers compensation required for hotel employees in Illinois?
Yes. Illinois requires employers to provide workers compensation insurance for almost everyone who is hired, injured, or whose employment is localized in the state, and one part-time employee is enough to trigger the requirement. The coverage pays for medical care and part of lost wages after a work injury.
Is a hotel's master policy the same as an HOA master policy?
No. An HOA or condo master policy is bought by a community association to insure the common elements and the association's liability. A hotel is an operating business, so it is insured with commercial coverages built for that business, typically commercial property, general liability, workers compensation, commercial auto, and umbrella or excess liability.
What do I need to get a hotel insurance quote?
Have the number of rooms, the year built and construction type, the years the roof, wiring, plumbing, and HVAC were updated, fire protection details, annual revenue split by rooms, food, and liquor, payroll, and three to five years of loss runs. Your current declarations pages and any franchise or lender requirements help us match coverage.
Is Pro Insurance Group an insurance company?
No. Pro Insurance Group is an independent insurance agency, not an insurance carrier. We represent the property owner, compare hotel and motel coverage across 20+ carriers, and place the policy with the company that fits. We are licensed in 40+ states and do not charge a broker fee.
Get Your Hotel Insurance Quote
One broker, 20+ carriers, and no broker fees. Tell us about your property and we will build the program around it.
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Reviewed by Neal Fusco, VP Commercial Lines
25 years in insurance, including 16 at Zurich North America in workers' compensation managed care and claims.
Illinois licensed insurance producer #18515626