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?

The average motel in the U.S. pays between $804 and $1,200 per year for a full business insurance package. That breaks down to roughly $67 to $99 per month. However, this is just a ballpark range, and actual business insurance costs can vary widely depending on your specific situation.

Every motel has its own unique risks and insurance needs, which is why there’s no one-size-fits-all premium. A small motel with one employee in a suburban area might have fewer risks compared to a larger hotel with several employees in a busy downtown area with higher crime rates.

The type of services you offer, like breakfast on site or access to a fitness center, plays the biggest role in your costs because of the relevant risks, as does the value of your property, and even your location.

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 variables can help you better estimate your insurance needs and prepare for the real costs of protecting your hotel.

Average Motel Insurance Costs For Coverage Types

When it comes to protecting your motel, 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 motels need.

• 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 covers third-party bodily injury, property damage, and advertising injuries. For example, if a customer slips on a wet floor and gets injured, this policy would help pay for their medical expenses and your legal defense costs.

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

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

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 general liability insurance with commercial property insurance. It protects against customer injuries, property damage, and loss or damage to your office building, furnishings, and equipment. For instance, if a fire damages your computers and files, the BOP would help cover repairs and replacements.

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

Liquor Liability Insurance

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

This only applies to motels that might have a bar on the premises or otherwise serve liquor in any capacity and it provides coverage in the event that a patron drinks too much and causes damage.

Cost depends on the size of your business, the services you offer, the number of years you’ve been in business, coverage limits, and claims history.

Cyber Liability Insurance

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

Cyber liability insurance covers the costs a motel might incur after a cyber incident. This extends to lost income after a cyber attack, forensic investigations, data recovery costs, regulatory fines, and the costs of informing customers about the attack.

Motels can benefit from this coverage if they handle any sensitive data or if they want to cover gaps in their insurance.

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.

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 covers medical bills, rehabilitation, and lost wages for employees injured on the job. For example, if an employee trips and falls over a cleaning cart and breaks their ankle, workers’ compensation would cover their hospital visit and part of their lost wages while they recover.

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 (whether in your office or on-site for each client), your claims history, and any implemented safety programs.

Commercial Auto Insurance

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

Commercial auto insurance covers vehicles owned or used by the business for accidents, theft, vandalism, or damage. For example, if an employee causes an accident while driving to the store in a company vehicle, this policy would cover the damages and any third-party claims.

Typical policy limits are around $1 million combined single limit (covering both bodily injury and property damage).

Factors influencing the cost include 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.

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. Small motels offering rooms and breakfast will likely pay less than a small or medium-sized motel with features like a bar or swimming pool.

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 destroys equipment like computers, this policy would pay for repairs or replacement.

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 professional liability or cyber protection.

What Factors Impact Your Motel Insurance Costs?

Motel insurance premiums are carefully calculated by underwriters based on your business’s risk profile. From the services you offer to your location and claims history, several factors influence what you’ll pay for coverage.

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

Running a motel 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 motel 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 companies 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 are expensive for both you and your insurer. Taking steps to reduce the chance of customer or employee injuries can lead to lower premiums over time. For example, installing non-slip flooring, using wet floor signs, maintaining clean, clutter-free offices and walkways, and regularly servicing company vehicles can help lower your general liability risk.

4. Create A Safe Working Environment

A solid safety program can reduce workers’ compensation costs. This includes training staff on fire safety procedures, and having clear emergency exit routes. Fewer accidents mean fewer claims—and that translates to lower premiums in the future.

5. 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 company a safer, more resilient business.