How Much Does Business Insurance Cost For Motels?

U.S. motels can expect to pay between $804 and $1,200 annually for comprehensive business insurance, averaging $67 and $99 per month. The primary cost drivers are the services you offer, the size of your business, location, and claims history.

How Much Does Motel Insurance Cost?

In the U.S., a typical motel usually pays around $800 to $1,200 per year for business insurance. This works out to under $100 a month. The exact price isn’t the same for everyone, because things like location, size, and risk level can change the business insurance costs.

If you own or run a motel, having the right insurance is important to protect your property, your guests, and your business. But many motel owners aren’t sure how much insurance will cost. 

Here are some of the biggest cost drivers:

• Services offered (affects professional liability and liquor or food requirements)
• Number of employees (increases workers’ compensation requirements)
• Property size and value (affects commercial property coverage)
• Past claims history (insurers charge more if you’ve filed claims)
• Business interruption coverage and other add-ons

Understanding these costs can help you budget better and make smart decisions for your business. 

Average Motel Insurance Costs For Coverage Types

Motel insurance is made up of different types of coverage, and each one has its own price. Understanding the average cost of these coverage types can help you see where your money is going and decide which protection you really need. Below is a breakdown of common motel insurance coverages and what they typically cost. 

• General liability insurance: $67 per month
• Liquor liability insurance: $100 per month
• Business owner’s policy: $115 per month
• Workers’ compensation insurance: $70 per month
• Commercial auto insurance: $125 per month
• Commercial property insurance: $250 per month
• Cyber liability insurance: $75 per month

General Liability Insurance

The average cost of general liability insurance for a motel is about $67 per month.

General liability insurance protects your motel if someone is hurt on your property or if you accidentally damage someone’s belongings. This coverage is one of the most important parts of motel insurance because it helps protect you from common, everyday risks. 

Factors that influence the cost include the business type (your services), location, office environment, contract requirements, and previous claims history.

Policy limits: $1 million per occurrence and $2 million aggregate.

Here’s a look at the average annual premiums for 10 different states:

Note: Estimates are modeled from average annual General Liability premiums for motel businesses using a blend of typical quotes from small and large insurance agencies and reflecting motel-specific exposures (guest injuries, premises liability, pool and amenity risks, number of rooms, on-site services, and location); actual premiums will vary by insurer, coverage limits and deductibles, claims history, local loss trends, and other business- and site-specific underwriting factors.

Business Owner’s Policy (BOP)

The average cost of a business owner’s policy (BOP) is about $115 per month for motels.

A BOP bundles several important types of insurance into one plan. It usually includes general liability insurance and property insurance. A BOP can lower overall insurance costs because everything is included in one plan, so motel owners often pay less than they would for individual coverages. 

Cost factors include the size of your business, location risk (such as flood or crime rates), business revenue, number of employees, and any optional endorsements like cyber protection.

Policy limits: $1 million per occurrence and $2 million aggregate for liability.

Here’s a look at the average annual premiums for 10 different states:

Note: Estimates are modeled from average annual Business Owner’s Policy (BOP) premiums for motel businesses, using a blend of typical quotes from small and large insurance agencies and reflecting motel-specific factors (number of rooms, property replacement cost, on-site amenities such as pools or restaurants, guest exposure, occupancy rates, and local hazard trends); actual premiums will vary by insurer, coverage limits and endorsements, deductible choices, claims history, building protection systems, and other site-specific underwriting factors.

Liquor Liability Insurance

The average cost of liquor liability insurance for motels is about $100 per month.

Liquor liability insurance protects your motel if you serve alcohol and a guest causes harm or gets injured because they were drinking. It’s an important coverage for motels that have a bar, restaurant, or offer alcohol at events. 

Several factors impact the costs including, the size of your business, the services you offer, the number of years you’ve been in business, coverage limits, and claims history.

Here’s a look at the average annual premiums for 10 different states:

Note: These estimates are modeled from average annual General Liability premiums for motel businesses using a mix of sample quotes from small and large insurance agencies and reflect motel-specific exposures (guest injuries and premises liability, number of rooms, on-site amenities, local loss trends, and typical underwriting factors); actual premiums will vary by insurer, coverage limits and deductibles, claims history, property location, and other business- and site-specific risk characteristics.

Cyber Liability Insurance

The average cost of cyber liability insurance for motels is $75 per month.

Cyber liability insurance protects your motel if you experience a data breach or cyberattack. This can include things like hackers stealing guest information, your computer system going down, or someone gaining access to payment details. 

It’s an important protection for motels that store customer information or take online payments. 

Costs are based on factors like the size of your organization, the type of client data you handle, and the cybersecurity measures you already have in place.

Here’s a look at the average annual premiums for 10 different states:

Note: Estimates are modeled from average annual Cyber Liability premiums for motel businesses using a blend of typical quotes from small and large insurance agencies and reflecting motel-specific factors (guest data and payment processing exposure, property management systems, number of rooms and revenue, use of cloud services and third-party vendors, and existing IT security controls); actual premiums will vary by insurer, coverage limits and sublimits, incident response services, deductible choices, claims history, and other business- and site-specific underwriting factors.

Workers’ Compensation Insurance

The average cost of workers’ compensation insurance for a motel is around $70 per month.  This is typically based on the number of employees you have, so larger motels with multiple employees will see higher rates.

Workers’ comp insurance protects both your motel and your employees if someone gets hurt or sick because of their job. It also protects your business from legal claims related to workplace injuries. In many places, workers’ compensation is required by law if you have employees. 

Premiums are influenced by the size of your payroll, the type of work employees perform (whether in your office or on-site for each client), your claims history, and any implemented safety programs.

State laws decide the limits of workers’ comp, but in most cases it covers medical expenses and a portion of lost income, without a specific limit on how much can be paid. 

Here’s a look at the average annual premiums for 10 different states:

Note: Estimates are modeled from average annual Workers’ Compensation premiums for motel businesses using a blend of typical quotes from small and large insurance agencies and reflecting motel-specific factors (payroll size and mix of housekeeping/front-desk staff, job classifications, part-time vs. full-time ratios, regional wage levels, and local claim frequency); actual premiums will vary by insurer, state rate filings, experience modification factor, payroll audits, safety and return-to-work programs, and other business- and site-specific underwriting factors.

Commercial Auto Insurance

The average cost of commercial auto insurance for motels is about $125 per month.

Commercial auto insurance protects vehicles that your motel uses for business. It helps cover costs if a vehicle is damaged, stolen, or involved in an accident. It can also pay for injuries to drivers, passengers, or other people. 

If your motel uses vehicles for business purposes, this insurance is important to avoid paying big expenses out of pocket. 

Several factors impact the costs including the number and type of vehicles, how often they are used, the driving records of employees, and whether you add endorsements like hired and non-owned auto insurance (HNOA) for employee-owned vehicles used for company services like driving to and from off-site locations.

Policy limits: $1 million combined single limit (covering both bodily injury and property damage).

Here’s a look at the average annual premiums for 10 different states:

Note: Estimates are based on blended average annual Commercial Auto premiums for motel businesses from a mix of small and large insurance agencies and reflect motel-specific factors (number and type of vehicles used for shuttle or property services, driver records, annual mileage, vehicle values, garaging ZIP code, and local loss trends); actual premiums will vary by insurer, coverage limits and deductibles, fleet size, driver histories, and other underwriting and location-specific risk factors.

Commercial Property Insurance

The average cost of commercial property insurance for a motel, when purchased separately, usually runs $250 per month. This ranges dramatically depending on the size of the motel and the other amenities offered. 

This policy protects your motel building and everything inside it, like furniture, equipment, and supplies, from damage or loss. 

It helps pay to repair or replace your property so your business can keep running. For motel owners, this insurance is important to protect both the building and the things that keep the business.

Premiums are determined by factors like the building’s age and construction type, fire safety systems in place, replacement cost of equipment, and neighborhood crime rates. 

Here’s a look at the average annual premiums for 10 different states:

Note: Estimates are modeled from average annual Commercial Property premiums for motel businesses using a blend of typical quotes from small and large insurance agencies and reflect motel-specific factors (number of rooms and building replacement cost, on-site amenities like pools or restaurants, inventory and contents values, local hazard exposures such as flood or wind, and fire/security protections); actual premiums will vary by insurer, coverage limits and endorsements, deductible choices, property condition and protection systems, prior claims, and other site-specific underwriting factors.

Motel Business Insurance Costs By Provider

Motel business insurance costs will vary greatly depending on the insurance carrier. Use the table below to find average costs across different providers.

Note: These estimates are based on average annual premiums for motels and small lodging businesses observed across both small and large agencies and reflect common coverages such as general liability, property, business interruption, workers’ compensation, and liquor or special-event liability where applicable. Actual premiums will vary by location, number of rooms, amenities, revenue, claims history, security measures, and chosen coverage limits.

What Factors Impact Your Motel Insurance Costs?

The cost of motel insurance isn’t the same for every business. Several factors can affect how much you pay. Things like the size of your motel, it’s location, the types of coverage you choose, and even your past claims. Understanding these factors can help you predict costs and make smarter choices for your insurance. 

Type Of Services

Different motels carry different risks. Motels that have a swimming pool, jacuzzi, or fitness center will typically have higher risks, as will those that sell food or alcohol.

Location

Motels in high-crime, flood-prone, or urban areas typically pay more for property and liability insurance. A low-risk suburban location with fewer claims can lower your premiums.

Size Of Your Operation

More square footage, employees, and revenue all raise the chances of a claim. Workers’ compensation costs also rise with larger staff counts, especially in environments where workers travel to and from third party sites.

Property Value And Office Equipment

Expensive office equipment for a motel or custom furnishings in the lobby increase your commercial property premiums. Many hotels add endorsements like cyber insurance to protect client information and other data.

Claims History

If you’ve filed frequent insurance claims, underwriters will see you as a higher risk, leading to higher rates. A clean claims record can qualify you for discounts.

Policy Limits And Deductibles

Higher policy limits mean better protection but come with a higher premium. Choosing a larger deductible can lower your monthly costs but raise your out-of-pocket risk when claims occur.

Optional Endorsements

Add-ons like business interruption, cyber liability, and hired and non-owned auto coverage tailor protection but increase your premium. They are essential for motels with employees who use personal vehicles for business errands or high risks of natural disasters interrupting business.

Insurance Provider

Rates vary among insurers. Some specialize in motel risks and offer better pricing or more flexible options for motels. Comparing quotes from multiple carriers can save you money.

How To Lower Your Motel Insurance Costs

Motel insurance can be expensive , but there are ways to lower the cost without giving up important protection. By making smart choices, improving safety, and comparing options, motel owners can save money on their insurance. Here are some tips to help reduce your motel insurance costs.

1. Bundle Policies

Many insurance companies offer discounts if you buy more than one type of insurance, like combining property and liability coverage into a Business Owner’s Policy (BOP).

2. Increase Your Deductible

A deductible is the amount you pay out of pocket before insurance starts covering costs. Choosing a higher deductible can lower your monthly or yearly premium, but make sure you can afford it if something happens. 

3. Compare Multiple Insurance Quotes

Don’t just go with the first insurance company you find. Getting quotes from different insurers can help you find the best price for the coverage you need.

4. Review Your Coverage Regularly

Your motel may change over time, new equipment, renovations, or fewer risks. Reviewing your policy each year ensures you’re not paying for coverage you don’t need and that you have enough protection where it matters. 

5. Improve Safety & Security

Installing security cameras, smoke detectors, fire alarms, and proper lighting can reduce the risk of accidents, theft, or damage. Insurance companies may offer lower rates for motels with these safety measures.