Insurance Disputes for Hotel Losses in Alabama and Florida
Helping policyholders throughout the Southeast protect their hotels and investments
When a grease fire, natural disaster, or any event strikes a hotel, there are multiple types of damage. The hotel buildings will need repair. If rooms can’t be rented to customers or the dining area can’t serve food and drinks, the hotel will lose profits during the interruption of the business. Maids, chefs, busboys, concierges, and other employees won’t be able to earn a living. The current customers will need to move and may file their own claims if their property was destroyed. The information technology system may go down preventing the ability to take bookings.
We understand that tourism is a major industry in both Florida and Alabama. At Warhurst Law, we understand the methods and tricks insurance companies will take to try to deny your claim or limit the amount of damage. We understand how to detail each item of loss under every applicable policy. In most cases, we can negotiate a just settlement that leaves you in the same financial position as before you had to shut down. When necessary, we’re ready to hold the insurance carrier liable in court.
Types of insurance policies for hotel businesses
Hotels need a variety of insurance policies to cover different risks. Standard policies for hotels include:
- Property insurance. Property insurance should cover the damage to the physical structure of hotel – inside and out. It should cover the foundation, all the floors, the rooms, any banquet or meeting halls, fixtures, and all parts of the hotel structure. In addition, property insurance should cover the beds, appliances, and all the contents of the hotels.
- Liability insurance. Liability protects you if someone gets hurts on your property for any reason. It’s a critical component of any commercial insurance plan.
- Business interruption insurance. This type of insurance is aimed at compensating the hotel for the income it loses because the hotel can’t operate at full capacity or can’t operate at all. There are two main parts to claims based on this policy. The first is calculating the amount of revenue that was lost. The second is figuring the expenses that must be paid such as a mortgage and utilities, and adjusting for expenses that can be avoided because the hotel isn’t operating.
- Flood insurance. Separate flood insurance is required to cover damage due to rising waters as opposed to water damage due to heavy rains or other causes.
- Comprehensive insurance. If the hotel has any vehicles to help people get to and from the hotel or for any other reason, comprehensive insurance should pay for the value of the vehicles.
- Workers’ compensation. If you have at least 5 employees, you probably need to carry workers’ compensation insurance.
Common hotel insurance disputes
The following issues often need to be resolved when hotel business is interrupted:
- What needs to be repaired, and who should handle those repairs
- How long it should take to do the repairs
- Whether the loss is partial or total
- How the damages are valued – fair market value, replacement value, or some other value
- If exclusions apply
- How to coordinate the business interruption policy with the property insurance policy claims
- Which policy covers repairs to the information technology systems
- If the hotel suffered hidden structural damage
- If the policy covers losses sustained by guests
- If water-related damage is covered by the property insurance or the flood insurance policy
In addition, experienced insurance attorneys work aggressively to negotiate advances and temporary payments while repairs are being made, or to negotiate a full and prompt settlement.
There may be issues about who owns the hotel and the rights of any mortgage holders to determine what repairs are made and by whom. There may also be issues if an owner owns multiple hotels.
Business interruption issues for hotels
Our lawyers work with your accountants and other financial personnel to fully document your lost revenue and your expenses. This includes reviewing tax returns, financial records, profit and loss statements. It includes itemizing all your fixed expenses and variable expenses. It may involve different accounting methods to accurately determine the full amount of lost income.
Business interruption insurance should also include payroll coverage for bell clerks, front desk staff, and other personnel. Hotels want to make sure they can keep good staff when the hotel reopens. Payroll coverage may be available if the hotel is expected to reopen in a month but may not be available for long-term delays.
Talk with a premier Florida and Alabama insurance dispute lawyer about your hotel claim
Experience does make a big difference. At Warhurst Law, we’ve been fighting for hotels and businesses when disasters or events cause damage to their building and to the daily operations. We understand the legal issues and the practical frustrations. To schedule an appointment at our office in Mobile, call Warhurst Law at 251-694-1932 or complete our contact form. We represent hotels, motels, and other lodging businesses in Florida and Alabama, including the Gulf Coast and Panhandle, and across the Southeast.
* Warhurst Law cannot and does not guarantee an outcome to any case.