How Much Does Insurance Cost For Hotels? 2025 Rates

U.S. small hotel businesses can expect to pay between $720 and $1,200 annually for comprehensive business insurance, averaging $60 to $100 per month. Costs for large businesses can exceed up to $600 per month. The primary cost drivers are location & state regulations, business size & risk exposure, number of employees, coverage limits, claims history, and industry risk.

How Much Does Hotel Insurance Cost?

Running a hotel in the U.S. usually means spending about $720 to $1,200 a year on full business insurance. That’s roughly $60 to $100 each month. The exact price can vary depending on things like your hotel’s size, what services you offer, and where you’re located. 

Hotel insurance is an important part of protecting your business from unexpected problems, like accidents, lawsuits, or property damage. But many hotel owners wonder how much this coverage actually costs. Business insurance cost can vary a lot because every hotel is different. 

Here are some of the biggest cost drivers:

• Number of employees (affects workers’ comp and liability)
• Property size and value (affects commercial property coverage)
• Location (affects property insurance)
• Guest capacity and foot traffic (affects general liability)
• Services offered (affects general liability, liquor liability, and workers compensation)
• Security measures (affects general liability and property insurance)
• Past claims history (insurers charge more if you’ve filed claims)
• Business interruption coverage and other add-ons

Knowing these factors makes it easier to figure out what insurance you need and what you might actually pay to keep your hotel protected. 

Average Hotel Insurance Costs For Coverage Types

When running a hotel, it’s helpful to know how much different types of insurance usually cost. Each policy protects your business in a different way, and the price can vary based on the risks involved. By looking at the average costs for common coverage types, you can get a better idea of what to expect and plan your budget more confidently.

• General liability insurance: $60 per month
• Business owner’s policy: $57 per month
• Liquor liability insurance:  $51 per month
• Workers’ compensation insurance: $47 per month
• Commercial property insurance: $120 per month
• Cyber liability insurance: $45 per month

General Liability Insurance

The average cost of general liability insurance for a hotel is about $60 per month.

General liability insurance is one of the most important policies for any hotel. It protects you if a guest or visitor gets hurt on your property or if you accidentally damage someone else’s belongings. 

It also protects your hotel from claims of advertising mistakes, like using someone’s slogan or photo without permission. Overall, this policy helps your hotel handle common risks and avoid big financial losses. 

Several factors impact the costs, including the business size, location, customer traffic volume, previous claims history, and whether high-risk activities like live entertainment are offered.

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

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

Note: These estimates are based on average annual premiums for hotel businesses, compiled from both national carriers and regional insurance agencies. They reflect typical coverage limits for small-to-medium hotels, considering risks such as guest safety, property damage, food service liability, and employee-related exposures. Actual premiums will vary depending on hotel size, amenities offered (e.g., pools, gyms, restaurants), claims history, number of employees, and state-specific regulations.

Business Owner’s Policy (BOP)

The average cost of a business owner’s policy (BOP) is about $57 per month for hotels.

A BOP is a bundle of important insurance coverages made for small to medium hotels. Instead of buying each policy separately, a BOP combines them into one plan, usually at a lower price. 

It usually packages property insurance, general liability insurance, and sometimes business interruptions coverage. 

Several factors impact these costs, including the hotel’s property value, location risk, business revenue, number of employees, and any optional endorsements like food spoilage or business interruption insurance.

Because this policy packages these coverages together, a BOP is simple, cost-effective, and helps hotel owners get the basic protection they need in one place. 

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

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

Note: These estimates reflect average Business Owner’s Policy (BOP) premiums for hotel businesses, which typically combine general liability and commercial property coverage. Figures account for industry-specific risks such as guest injury claims, property damage, theft, fire hazards, and liability exposures tied to food service or amenities. Actual premiums will vary depending on hotel size, number of employees, location, coverage limits, property value, and claims history.

Liquor Liability Insurance

The average cost of liquor liability insurance for a hotel that serves alcohol is about $51 per month.

Liquor liability insurance protects your hotel if something goes wrong when you serve alcohol. If your hotel has a bar, restaurant, or offers alcohol at events, you could be held responsible if a guest becomes intoxicated and causes harm to themselves or others. 

The cost depends on how much of your income comes from alcohol sales, what kinds of alcohol you serve, and if you’ve had any past alcohol-related claims. 

Overall, liquor liability insurance helps keep your hotel safe from risks that come with serving alcohol. 

Policy limits: $1 million per claim, but higher limits are sometimes required by state laws or event contracts.

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

Note: These estimates are based on average annual premiums offered by both small regional agencies and larger national carriers for hotel businesses that serve alcohol. Actual premiums will vary depending on factors such as hotel size, bar/restaurant operations, event hosting, location risk profile, claims history, and coverage limits.

Workers’ Compensation Insurance

The average cost of workers’ compensation insurance for a hotel is around $47 per month.

Workers compensation helps protect your hotel and your employees if someone gets hurt or sick because of their job. This policy helps keep your team safe and your hotel protected from costly workplace injuries. 

It pays for things like medical bills, rehabilitation costs, and lost wages, so your staff can get the care they need without creating a financial burden for your business. 

Several factors impact the costs, including the size of your payroll, the type of work employees perform (kitchen staff, servers, housekeeping, bartenders), your claims history, and any implemented safety programs.

Each state sets rules for workers compensation limits, but usually the insurance covers medical bills and part of the employee’s lost wages, and there’s often no fixed maximum. 

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

Note: These estimates are based on average annual Workers’ Compensation premiums for hotel businesses, incorporating state-specific base rates, employee classifications, and payroll ranges typical of both small boutique hotels and larger multi-location chains. Actual premiums will vary depending on the size of the hotel, number of employees, claims history, and insurer underwriting practices.

Commercial Property Insurance

The average cost of commercial property insurance for a hotel usually runs $120 per month.

Commercial property insurance protects your hotel’s building and everything inside it, like equipment, furniture, and supplies, from damage or loss. It covers events like fire, theft, storms, or vandalism. 

Several factors impact the premiums such as, the building’s age and construction type, fire safety systems in place, replacement cost of equipment, neighborhood crime rates, and whether you add endorsements such as equipment breakdown coverage.

Policy limits usually depend on how much it would cost to replace your hotel’s building and equipment. For most hotels, this can be quite high, often hundreds of thousands of dollars, depending on the location, size, and value of your property and assets. 

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

These figures represent average annual premiums for hotel commercial property insurance, derived from ranges reported by both small and large insurance agencies. They account for regional risk factors (e.g., hurricanes in Florida, earthquakes in California, winter storms in Illinois), property size and construction type, and coverage limits typically selected by hotel operators.

Cyber Liability Insurance

The average cost of cyber liability insurance for a hotel usually runs $45 per month.

Cyber liability insurance helps protect your hotel if there’s a problem with your digital systems or data. This includes citations like data breaches, hacking, or ransomware attacks where customer information, like credit card number or personal details ,get stolen or exposed. 

As hotels rely more on online bookings and digital payments, cyber liability insurance is becoming important to keep your business safe from costly digital risks. 

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

Note: These estimates are based on average annual premiums for Hotel businesses, reflecting data from both small and large insurance agencies. Actual premiums will vary depending on factors such as property size, guest volume, claims history, coverage limits, and regional risk exposure.

Hotel Business Insurance Costs By Provider

Hotel 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 hotel businesses, considering both small and large agencies. Coverage typically includes general liability, property insurance, business interruption, workers’ compensation, liquor liability (if applicable), and commercial auto. Actual premiums will vary depending on hotel size, location, amenities offered (restaurants, bars, pools), number of employees, claims history, and coverage limits

What Factors Impact Your Hotel Insurance Costs?

The cost of hotel insurance isn’t the same for every business. Many factors can affect how much you pay, from the size of your hotel to the services you offer. Understanding these factors can help you estimate your insurance costs more accurately and choose the right coverage for your hotel. 

Type Of Hotel And Services Offered

Hotels with full-service restaurants, bars, spas, pools, or event spaces usually pay more for insurance. Serving alcohol or hosting live entertainment increases your risk, which can raise your premium.

Alcohol Sales

If your hotel serves alcohol, especially in a bar or restaurant, liquor liability insurance is often required. The more alcohol you sell, the higher your insurance costs may be due to the risk of alcohol-related incidents.

Hotel Location

Hotels in areas prone to crime, flooding, or severe weather usually face higher premiums. A property in a safer or lower-risk area typically costs less to insure.

Size Of The Hotel

Larger hotels with more rooms, employees, and guest traffic are more likely to have claims. More staff also means higher workers’ compensation costs, especially in departments like housekeeping or food service.

Property Value And Equipment

If your hotel has expensive equipment, like commercial kitchen appliances, elevators, or high-end furnishings, your property insurance will cost more. You might also need extra coverage for equipment breakdown or food spoilage.

Policy Limits And Deductibles

Higher coverage limits give you more protection but come with higher premiums. Choosing a higher deductible (what you pay out of pocket when something goes wrong) can lower your monthly cost, but increases your risk when filing a claim.

Claims History

If your hotel has had multiple insurance claims in the past, you may be seen as higher risk. A clean claims history can help lower your premium and may even earn you discounts.

How To Lower Your Hotel Insurance Costs

Hotel insurance can be expensive, but there are ways to lower the cost without sacrificing protection. By taking steps to reduce risks and choosing the right coverage, hotel owners can save money on premiums while keeping their business safe. 

1. Policy Bundles

Combining multiple policies into one package, like a Business Owner’s Policy, can often save money compared to buying each policy separately. It’s simpler and usually cheaper. 

2. Increasing Deductible

A deductible is the amount you pay out of pocket before insurance kicks in. Choosing a higher deductible lowers your monthly or yearly premiums, but you’ll pay more if you need to file a claim. 

3. Reviewing Coverage Annually

Checking your insurance every year helps make sure you’re not paying for coverage you don’t need and that you have enough protection for any changes in your hotel. 

4. Reduce Risks

Making your hotel safer can lower insurance costs. Examples include, installing security cameras, sprinklers, fire alarms, and staff training programs to prevent accidents. 

5. Train Your Staff On Alcohol Service

If your hotel serves alcohol, be sure your team is trained in responsible alcohol service. Many states offer alcohol certification programs like TIPS or ServSafe Alcohol. Insurers may offer discounts to businesses that require this training, as it shows you’re proactively reducing liquor liability risk.

6. Shop Around For Coverage

Comparing quotes from different insurance providers helps you find the best price and coverage for your hotel. Rates and policies can vary, so it pays to look at multiple options.