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?

Most hotels in the U.S. pay between $720 and $1,200 per year for a full business insurance package. That works out to about $60 to $100 per month. However, this is just a general range, the actual cost can be higher or lower depending on your hotel’s size, services, and location.

Insurance prices vary because every hotel is different. A small inn or bed and breakfast with just a few rooms will usually pay much less than a large hotel with restaurants, bars, pools, and dozens of employees. Things like whether you serve alcohol, host events, or have special amenities (like a spa or gym) all play a role in how much you’ll pay.

Your location and equipment also matter. Hotels in areas with more crime or higher lawsuit risks often pay more for liability insurance. If your hotel has a kitchen, pool, or other features that could cause injury or property damage, your business insurance cost may be higher compared to a hotel that only offers basic overnight stays.

Here are some of the biggest cost drivers:

• Number of employees (affects workers’ comp and liability)
• 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 variables can help you better estimate your insurance needs and prepare for the real costs of protecting your hotel business.

Average Hotel Insurance Costs For Coverage Types

When it comes to protecting your hotel, different types of insurance cover different risks. Understanding the average cost, coverage details, and what influences pricing for each policy type can help you build a more effective insurance plan. Here’s a closer look at the major coverages most hotels need:

• 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 covers third-party bodily injury, property damage, and advertising injuries. For example, a guest slips on a wet lobby floor and breaks their arm. General liability insurance helps cover their medical bills and your legal costs.

Typical policy limits are $1 million per occurrence and $2 million aggregate.

Factors that influence the cost include the business size, location, customer traffic volume, previous claims history, and whether high-risk activities like live entertainment are offered.

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 bundles general liability insurance with commercial property insurance. It protects against customer injuries, property damage, and loss or damage to the hotel’s building, furniture, and equipment. For example, if a fire damages your hotel lobby and furniture, the BOP would help cover the repair and replacement costs.

Typical policy limits are $1 million per occurrence and $2 million aggregate for liability, with separate property coverage limits based on the value insured.

Cost factors include the hotel’s property value, location risk (such as flood or crime rates), business revenue, number of employees, and any optional endorsements like food spoilage or business interruption insurance.

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 covers claims related to injuries or property damage caused by intoxicated patrons served at your hotel. For example, if a guest drinks excessively at your hotel bar and later causes a car accident, this policy can help cover legal fees and any damages.

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

Cost depends on the percentage of your revenue from alcohol sales, the type of alcohol served, staff training in responsible alcohol service, and previous liquor-related claims.

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’ comp covers medical bills, rehabilitation, and lost wages for employees injured on the job. For example, if a housekeeper slips while cleaning and breaks a wrist, workers’ comp would pay for their medical treatment and a portion of their wages during recovery.

Policy limits are regulated by each state, but typically include medical costs and a percentage of lost wages without a set cap.

Premiums are influenced by the size of your payroll, the type of work employees perform (kitchen staff, servers, housekeeping, bartenders), your claims history, and any implemented safety programs.

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 covers damage to the building and its contents due to fire, theft, vandalism, or certain weather events. For example, if a fire damages your hotel’s kitchen equipment and dining area, this policy would help cover the cost of repairs and replacements.

Typical policy limits are based on the replacement cost value of the insured property, which could easily reach into the hundreds of thousands depending on your location, building size, and equipment investments.

Premiums are determined by factors like 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 or food spoilage protection.

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 protects businesses from financial losses resulting from data breaches, cyberattacks, and other technology-related risks. It helps cover costs like data recovery, legal fees, notification expenses, and potential lawsuits related to compromised customer information.

For example, if a hacker breaches your hotel’s reservation system and steals guests’ personal and payment information, cyber liability insurance can help cover the costs of notifying affected customers, investigating the breach, and defending against any resulting lawsuits.

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?

Hotel insurance premiums are carefully determined by underwriters based on your hotel’s risk profile. Factors like the services you offer, your location, and your claims history all play a role in shaping the cost of your coverage.

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

Running a hotel is expensive, but your insurance bill doesn’t have to break the bank. While you can’t eliminate the need for coverage, you can take smart steps to reduce your premiums without sacrificing protection. Here are some practical ways to lower your hotel insurance costs:

1. Bundle Your Policies

One of the easiest ways to save is by bundling multiple policies. Most insurers offer a Business Owner’s Policy (BOP) that combines general liability and property insurance at a lower rate than if you bought them separately. If you also need workers’ compensation or liquor liability insurance, bundling all three through the same provider can lead to additional discounts. Not only does this simplify your paperwork, but it also makes your coverage more cost-efficient.

2. Ask About Discounts

Insurance companies often reward businesses that commit to a policy long-term. Ask your provider if they offer multi-year discounts for signing a two- or three-year agreement instead of renewing annually. You might also qualify for lower rates if you pay your premium in full instead of in monthly installments.

3. Implement Safety Measures

Accidents involving guests or staff can be costly for both your hotel and your insurer. Taking steps to reduce risks can help lower your insurance premiums over time. For example, installing non-slip mats in bathrooms, using wet floor signs in the lobby, keeping hallways clear, and regularly maintaining kitchen and elevator equipment can all reduce the chance of injuries, and claims.

4. Create A Safe Working Environment

A strong safety program can reduce injuries and help lower your hotel’s workers’ compensation premiums. Training staff on safe lifting, food handling, fire safety, and keeping emergency exits clear makes a big difference. Fewer workplace accidents mean fewer claims, and that can lead to lower insurance costs over time.

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. Adjust Your Deductible

Your deductible is the amount you pay out of pocket before insurance coverage kicks in. Choosing a higher deductible can significantly reduce your monthly premiums. Just make sure you can comfortably cover that amount if a claim arises.

By taking these steps, you not only save money but also make your hotel a safer, more resilient business.