Insurance Considerations for Hotels and Restaurants During the Pandemic

​During this phase of settling the new normal, there are things that business owners should consider. New challenges are introduced, and with this, it can affect these owners’ livelihood in the long term. Hotels and restaurants were forced to shut down for the meanwhile, but that means that there is no income for the owners. In this article are important points hotel and restaurant owners should consider.

Sustain the Business
Business Interruption Insurance is an important type of coverage in an insurance policy for the sole purpose of covering for loss of income. It is covered to give another chance to reopen the business in the future.

Limiting Access
Both policies mentioned below play a considerable role in navigating contractual obligations and legal strategies to recover from the loss of income and the expenses required to be paid during the pandemic.

• Civil Authority Coverage
  This policy applies when the government, whether local, state, or federal, authorizes the limitation of access to any aspect of the business. This policy is critical for the business owner to conduct and operate the business normally.
• Contingent Business Interruption Insurance
  This insurance is for when the loss is indirect. If there is an interruption of supplies from a supplier, the insured business owner is considered covered by the business owner’s insurance policy.

Contractual Obligations
In a contract agreement, there are legal duties that employers and employees are responsible for and are called contractual obligations. Force majeure is a way to defend from contractual obligations. It arises when parties are in an unforeseen reasonable event that prevents them from performing their contractual obligation.

This may be used against reasons that surround the COVID-19 challenges the business owners are facing. Safety measures were applied everywhere, and lockdowns and business closures occurred. It is not within the control of business owners that their business is gravely affected. Therefore, any existing contractual obligations are deferred and impossible to perform.

Conclusion
During and in the aftermath of this unexpected disaster, restaurants and hotels are inevitably pressured to find ways to handle limited cash flows and stop the bleeding losses to restore or reduce the damage due to their losses of profits, properties, and brand value.

At Desmond Insurance, we do our best to make sure that our clients are well-protected with affordable and comprehensive policies. We make sure to go the extra mile to help you with your needs. To learn more about how we can help you, please contact our agency at (859) 491-5100 or Click Here to request a free quote.