Question

You have opened a new motel with an attached restaurant and cocktail lounge. What are the risks that your business faces? What insurance coverages should you consider essential in your insurance program?

Answer 1

Answer: Motel- It is road side hotel that is designed for motorists and it has parking area also.

Risks in Motel business- Are as following:

1. People who travel on the road, may only come in the motel, people living in center of the city or far, will not come to the motel, so revenues are hard to earn when there is off season, off season is the season when there is no holidays.
2. We have to keep the raw food, vegetables, fruits and cocktails ready but if people do not come, food, vegetables and fruits will get stale because they are perishable in nature, inventory of the food items is tough to arrange in very short span of time and in bulk when needed and risk of wastage is there.
3. Consumers' demands and taste keep on changing, they may not like the service and food of motel and will not turn up again.
4. Facility could be destroyed by fire.
5. Property and belongings of guests may be stolen or damaged.

Insurance for Motel business- We will go for "Property Insurance" so as to safeguard the business against loss that is caued by fire, damage etc. Some insurance policies provide insurance for small motels. There are variety of coverage, given by insurance companies.

Liability Insurance- Motel business needs a general liability insurance policy, it covers bodily injury, property damage, personal injury etc.

Examples: A guest slips in the washroom and has a severe head injury.