Business Insurance for a Lodging Establishment

Commercial Auto Insurance

If the business will use a vehicle, then that vehicle must be covered by commercial auto insurance. Personal auto policies generally do not cover losses caused when a passenger vehicle is used for commercial purposes. This will be necessary insurance if vehicles are used in the business.
Other Insurance
Lodging businesses are only profitable while operating with guests. If there is a substantial disruption of your business, such as a fire, remember property insurance will only replace the property - not the lost income. The lodging business owner should consider business interruption insurance. Lodging businesses are increasingly computer dependent, consider specific network risk coverage.
Finally, it cannot be stressed enough that certain natural disasters, such as floods and earthquakes require separate endorsements or separate policies and are not covered by most property policies. So it may be that the old line, "location, location, location," as the most important factor in the value of a property applies to its insurance as well.

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Before You Purchase Commercial Auto Business Insurance

Commercial auto insurance is one of the most important aspects of your business insurance program. If your business uses a vehicle, or many vehicles, you need commercial auto insurance and you will want to ask your business insurance professional some important questions. You will also want to provide your business insurance professional with a complete picture of your vehicle use.
Consider the following points and ask the following questions.

How Many Vehicles and Drivers Will the Business Insure?

Commercial auto insurers often separate coverage types based on the number of vehicles and drivers to be insured. Fleet insurance is an option for businesses that will have a number of vehicles and drivers. The number of vehicles differs with each insurer and may depend on the class of vehicle. But, fleet insurance may be a less expensive alternative than individual, per vehicle policies.

What is the Policy Definition of Commercial Use?

Your personal auto policy will exclude coverage for commercial uses of your vehicle. A commercial policy will establish a definition of commercial use as well. It is important that you read the definition and discuss this with your insurance professional. If there is any question, it is better to obtain a commercial auto policy so that, in case of an accident, there is no chance of being uninsured.

How Can You Lower Premium Costs?

Commercial auto business insurance premiums can be lowered by:

• Business Location - the location of the vehicles determines premiums for theft.
• Driver Records - hire only qualified drivers with safe driving records.
• Choice of Vehicle - sales people may want sports cars, but five-star safety rated, domestic, mid-sized sedans have the lowest premiums.
• Deductibles - can your business afford part of the risk and maintain a high deductible? If so, your premiums will be lower.
• Safety and Anti-Theft Devices - alarms, GPS tracking, air bags, seat belts, and other such devices can significantly lower premiums.

• Insure U for Small Business Tips on Lowering Premiums

Special Commercial Coverages and Considerations.

Certain businesses must adhere to federal and state regulatory standards in the operations of their vehicles. For example, if your business will be hauling cargo interstate, there are specific Department of Transportation requirements for insurance that must be met. You will need to make sure you and your insurance professional have a thorough understanding of those requirements. Also, if you will be delivering or hauling for others or using other's equipment such as leased trailers or rental equipment, you will need hired or non-owned vehicle coverage.

Who is the Insured?

Make sure you know the insured. Sound simple? Maybe. But, all to often businesses set up a leasing company to lease equipment to the main company and the leasing company is the titled owner of the vehicles. A common mistake is to identify the main company and not the leasing company as the titled owner on the policy. Or, the dba of the company and not the full name of the company is listed. You want the full name of the company as an insured, the titled owner, any affiliates, and dba, and all employees as insureds on your commercial auto policy.

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Before You Choose an Insurance Company

Choosing an insurance company to provide your business insurance is an important part of your business insurance plan. Once you have chosen an insurance professional, you will need to choose among different policies and programs offered by different insurers.
Here are some things to consider in choosing an insurance company for your business insurance.

Price, Stability, and Service

Price, stability and service are three important considerations in choosing an insurance company.

• Price: The cost of coverage can vary greatly from one insurer to the next without any difference in coverage. Have your insurance professional secure quotes from at least three insurers.
• Stability: Insurance companies do fail and the results can be disastrous. Companies are rated for their stability by various rating services such as A.M. Best or Standard & Poor . Consider companies with a Best's Rating of B+ or better.
• Service: You will want an insurance company with an excellent reputation for customer service.

Registered in Your State

You will want an insurance company with a physical location in your state. You will also want a company that is registered to sell insurance in your state.
Sometimes smaller insurers will sell policies through another company registered in the state. For your business, stay with a company registered and physically present in your state. You can search on your state insurance department website to determine if an insurer is registered in your state.

• Listing of State Insurance Departments

Choice of Counsel Provsion

Some insurance companies have a choice of counsel provision in their policy that allows the insured to pick their own attorney to defend them in case of a lawsuit. This can be a valuable option and is typically only available for higher premium packages.
Regardless, find out how an attorney is retained to defend you in case of a lawsuit. Some lower value insurers make use of house counsel attorneys that are actually employees of the insurance company. You want the ability to choose your own counsel or be promised that skilled representation from an independent lawfirm will be provided to you.

Pick a Market Leader

The insurance business is one of fluctuating highs and lows in each market. Some insurers will enter markets for a short period of time to determine profitability and leave the market (and their insureds) if it appears unprofitable.
Stay away from market floaters or companies offering a "deal' because they are new to the market. Instead, find the leaders in the market that have stayed in the market for at least ten years. They will not be the cheapest premium. But, such companies typically offer extra services that make up for the extra cost.

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