Imagine kicking back at a lakeside cabin with a drink in your hand. The last thing on your mind is, “I wonder what the owner’s insurance policy is like.” Well, unless you’re an insurance agent.
Because of the COVID-19 pandemic, there was a massive drop in demand for hotels or similar temporary lodgings. But now that travel restrictions have been lifting across the country, the need for leasing or renting setups for mini-stays is increasing exponentially.
At Craig & Leicht, we received a quote request for a package policy for a company with twelve cabins that sit on a lake in East Texas. You can lease these cabins for two to thirty days, and they operate very similarly to a hotel.
If you’re feeling tempted to book a cabin for yourself, don’t worry, we were too. But before we could consider a vacation, we had to get them a quote.
Because the cabin rentals operate like hotels, they needed coverage for property buildings and general liability for operations. We were able to offer a quote for complete coverage for their operation and give them a unique policy.
Covering The Bases
No industry is safe from litigation, and unfortunately, litigation in the hospital industry can shut down a rental unit with bankruptcy or extreme financial concerns. Getting additional coverage can protect your client from a lawsuit.
When a business is offering lodging to customers, they run the risk of various complications if someone gets injured while on the property. These owners need to be prepared for every little thing to protect their assets in case something goes wrong on their property.
The size and scope of a lodging will determine the kind of coverage the property needs. For instance, a bed and breakfast will need a different policy than a set of cabins in the woods will.
For non-hotels, insurance policies need to be tailored to the amenities offered by the property. Using general coverage for a not-so-general client can leave them vulnerable to litigation. A tree is more likely to fall on a renter’s car at the cabin in the woods than at a chic bed and breakfast in a city. Not that it can’t happen at either location, but your policy has to consider the likelihood that it’ll happen at the property location.
Potential coverage add-ons may include:
· Flood
· Earthquake
· Spoilage
· Bailee’s Customers
· Commercial Articles Floater
· Contractor’s Equipment
· Fine Arts
· Signs
· Special Floater
· Computer Fraud
· Forgery
· Cyber Liability
· Employment-Related Practices
· Garage Keepers
· Stop Gap Liability
Your client won’t need all of these add-ons, but it’s best to prepare for the worst. At the same time, you don’t want to add on a bunch of clauses that don’t make any sense with the property. For example, earthquake insurance is an excellent idea for California properties but probably isn’t necessary for Arkansas properties.
When you have a unique client, you have to run a risk assessment to determine precisely what their needs and risks are. General coverage doesn’t always cut it, and you don’t want your clients going out of business over something that a surplus line policy could have covered.
As you review the coverage a property needs, look at the amenities they offer, the location, common risks associated with rented spaces, state requirements, and contracts with investors or lenders. It’s better to be safe than sorry. Get your client the best coverage possible so you can enjoy your drink by the lake, knowing that the owners are insured for anything and everything.
Unique Coverage for Unique Clients
At Craig & Leicht, we cover the weird and delight in finding solutions for unique situations.
If you have a client in need of a surplus line policy, we’re here to help. Tell us what you need, and we’ll generate a quote as quickly and accurately as possible so you can write coverage that effectively serves your client. We promise there’s no client or coverage that’s too strange.
If you have any questions don’t hesitate to call, our number is (713) 955-2130; let’s make you your client’s hero!
