Hospitality Insurance Pricing & Market Update
Q1 2024
In the dynamic restaurant industry landscape, evolving consumer preferences and technological advancements continue to shift the space. Today, while consumers are actively seeking healthier, globally inspired meals crafted from high-quality ingredients, the industry is witnessing a surge in off-premises dining and a rapid embrace of digitalization to meet the diverse needs of customers, driving more delivery and drive-thru business than ever before. With this continued shift, premises liability is predicted to continue being a lower risk frequency while there is still a rise in nuclear verdict severity that can be a challenge for catastrophe claims such as liquor liability and general slip/fall exposures.
The continued return of hotel occupancy paints a compelling picture of resilience. With an impressive 29.2% year-over-year growth in December, San Diego spearheads this resurgence, closely followed by San Francisco at 21.5%.1 This positive momentum is echoed across the entire U.S., with an increase just under 5% in ADR growth from December 2022.2 In the past two years, the hotel industry’s primary challenge has shifted from attracting customers to finding and retaining staff. In response, hotels have worked to enhance pay and benefits for workers but still lack adequate staffing, leading to challenges in training for new hires and delivery of a consistent guest experience, all of which can translate to higher risks in liability, workers’ compensation, and even property losses due to inadequate training on what to do in the event of a fire or water damage event.
Non-CAT exposed property with a favorable loss history | Flat to 10% increases |
CAT exposed property with favorable loss history | 10% to 20% |
General Liability
Excess Liability
General Liability with favorable loss history | Flat to 10% |
Umbrella & Excess Liability | 5% to 15% |
Workers’ Compensation
Auto
Workers’ Compensation | -5% to Flat |
Auto | 10% to 20%+ Larger schedules can impact rating/cost |
Cyber
Cyber | -10% to up 10% depending on controls |
Employment Practices Liability
Employment Practices Liability | -5% to Flat |
$20 Million Verdict
A hotel staff member suffered a spinal injury necessitating the use of a cane and prosthetic. The staff member was still able to work while seated. He sought accommodations, such as closer parking (for which he was charged) and a different break room (he was provided access to a storage room). After renovations worsened his working environment, he suggested modifications that were not made. The hotel staff member’s doctor recommended he stop working there. Jurors awarded $20 million on September 21, 2023.8
$25.1 Million Verdict
A Texan plaintiff, who progressed from a server to a food and beverage director at different hotel branches, filed a lawsuit, alleging gender-based pay disparities with male counterparts in similar roles. Jurors awarded $25.1 million on March 16, 2023.8
Partner with your broker early to prepare for any changes to increase greater renewal success.
It is important to work with your broker’s industry experts who understand the business and the market for placing the specific risk. Collaborating with a team that can best represent your risk and partner with your operations is more critical than ever in this disciplined market we are experiencing.
IMA has a team solely dedicated to managing cyber risks. They offer expert assistance, including coverage analysis, financial loss exposure benchmarking, contract language review, in-depth cyber threat analysis, and strategic development of comprehensive, high- value cyber insurance programs.
Our contract review teams add value to our clients’ overall risk management program by ensuring the indemnity language is market standard and doesn’t expose our clients to unforeseen losses that may not be insurable.
Tim Smith
SVP, National Hospitality Practice Director
Susan Devaughn
VP, National Accounts Hospitality
Drew Chamberlin
Account Executive
Karie Bell
National Accounts Restaurant Program Leader
Autumn Stone
Account Executive – Cyber Risk Solutions
Angela Thompson
Sr. Marketing Specialist, Market Intelligence & Insights