Hotel & Event Insurance: What You Need to Know

The information provided in this video does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information in this video may not constitute the most up-to-date legal or other information. Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter.

Introduction:

In this video, Sean Whalin (Co-founder and CEO of HopSkip) sits down with Barbara Dunn (Partner at Barnes & Thornburg LLP representing groups) and Lisa Sommer Devlin (Devlin Law Firm, P.C. representing hotels) to discuss what you need to know about hotel & event insurance.

TL;DR:

Hotel & Event Insurance: What You Need to Know

• The importance of insurance as a risk management strategy for both meeting planners and hotels.
• Commercial General Liability Insurance (CGL) is commonly required by hotels. This policy covers personal injury and property damage.
• Hotels are also typically well-insured to protect their multi-million dollar assets.
• Third-party vendors at events should also have adequate insurance, especially for high-risk activities.
• Insurance protects both the hotel and the event organizer from indemnity claims, making it essential in contract negotiations.
• For social events involving alcohol, liquor liability is an additional concern and often requires separate coverage.

This conversation was recorded during HopSkip's recent webinar "Navigating Meetings & Events in Q3"

What are the most common types of insurance coverage that meeting planners should require from hotels, and vice versa?

Video Transcript:

19:09 | Barbara Dunn

Insurance requirements and contracts, they really span the gamut. Certainly hotels look for insurance, as do convention centers and all types of vendors. And just a level set insurance is a way that the parties can manage their risk. You pay premiums to a company if something bad happens and there's a claim, the insurance is your backing.

So, when a hotel allows a group to come in and there is potential then for damage, they want to know that the group has that financial backing. Similarly, groups might ask the same of the hotels and making sure they have insurance in case something bad happens at the hotel's fault.

All that is to say that sometimes in the contract, you'll see insurance clauses that are more broad. They might say things like the parties represent a warrant, that they have sufficient amounts of insurance to cover their liabilities under the contract and then you get into a debate on what's considered "sufficient".

Other times you're going to see very specific types. So the main insurance that many of you are familiar with, commercial general liability insurance, sometimes called CGL for short, and that typically covers personal injury, property damage, etc.

You'll see reference to a dollar amount coverage in a contract. It's important that you say you if you're going to say in the contract that you have that insurance that you do. 

When you're bringing in vendors to work at your meetings and events, it's reasonable for the hotels to ask or to put in the contract that there's going to be a requirement that the vendors themselves show proof of insurance for they come in and work at the hotel. And again, it's a risk management strategy. Lisa, I know you counsel hotels on the other side probably on that same issue.

21:18 | Lisa Sommer Devlin

I do. And Barbara's right that you have to keep in mind that every hotel, even the smallest ones you work with, are a multi million dollar asset and so they're going to have liability insurance whether or not you're coming to their hotel, because they are at risk every day of something going wrong and them getting sued.

So I often see these very complex insurance demand clauses from groups saying you're going to have X, Y and Z, and the hotel has the insurance that it has. It doesn't change for particular people coming into the hotel, which is probably why you get pushback on those kinds of things.

Again, the hotels are going to be heavily insured because they have to be in order to protect themselves and operate their business.

22:07 | Lisa Sommer Devlin

Another thing I see is groups ask to be named as additional insured on the hotel's policy for the event.  Most hotels do not agree to do that because it requires them to go to their insurance broker for every group that comes in and get a new certificate of insurance, that adds additional risk to the insurance policy. It can change their premiums and it's a pain, frankly.

They'd have a full time person just getting certificates of insurance, which is why they don't do that. They may ask you to name the hotel as an additional insured on your group policy. That's a little bit easier process because you're just having that one meeting at that one period and you're just making one call to your broker to ask that usually it can be done at little or no cost to do that.

But getting back to the vendor aspect of it, Barbara's right. There's a big risk when you're bringing in outside vendors, depending on what they're doing.

If it's a florist delivering bouquets, maybe you don't need to worry about them having insurance. But I literally had one yesterday where somebody wants to bring in Polynesian fire dancers. Needless to say, you need to make sure that they are not only qualified to do what they're doing, but that they have sufficient insurance that if something goes wrong and god forbid they light the place on fire, that they're going to be able to pay for the damage that they're causing.

You have to look at every vendor and remember that every vendor having insurance helps not just the hotel, but also the group, because the group usually is obligated to indemnify the hotel or pay the hotel back for any damage that happens during their event. If their vendors have insurance and something goes wrong, the hotel can look to that insurance rather than asking the group to indemnify.

So insurance helps everybody. It especially helps when you have social events because when you have liquor and dancing when things can go wrong. So we really recommend that even for social events, that insurance is needed.

23:56 | Barbara Dunn 

I'll just add Lisa comments in the chat about liquor liability as you just alluded to making sure that there's coverage, it's a common exclusion on the commercial general liability policy for liquor claims.

So in order to get coverage for that, often the groups need to pay more and get a ride or certificate to have that coverage, which you want even as a social host of liquor. And that's a topic in and of itself, as you know. 

24:30 | Lisa Sommer Devlin

And let me add one thing because one of the questions was, is it common to require additional insured when it's a rooms only contract?

Most of my clients do not require additional insured in rooms only. They don't even require insurance because you're basically transient guests, even though there's a whole bunch of you. So usually there's not insurance or indemnification in those agreements.

Conclusion:

Navigating the intricate landscape of insurance coverage is a critical but complex task for both meeting planners and hotels. Whether it's deciding on the type of insurance needed or understanding the level of coverage that should be in place, these considerations are integral to mitigating risks and ensuring a successful event.

As we've learned, insurance is more than just a contractual requirement; it's a tool for fostering trust and collaboration between all parties involved.

If you're a meeting planner or hotelier looking to simplify your contracting and sourcing process, HopSkip's platform offers a streamlined approach, making it easier to manage these often complicated aspects, all while helping you focus on what really matters—creating meaningful experiences for your attendees.

Find out why Event Professionals are switching to HopSkip

The information provided in this video does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information in this video may not constitute the most up-to-date legal or other information. Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter.