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July 1, 2024

Avoid emerging threats to the hotel industry by mitigating and managing risk


  • The insurance landscape for hotels has transformed, presenting risks.
  • The key risks are a changing statute of limitations and insurance carrier actions.
  • Marsh McLennan Agency offers tailored solutions and expertise.

In recent years, the insurance landscape for hotel owners, managers, and developers has undergone a significant transformation. This shift presents the industry with unprecedented risks and exposures.

The current state of the market is a result of various factors, including changes in legislation and the resulting actions from insurance carriers. Hotel clients now face more challenges and uncertainties, necessitating comprehensive risk management solutions.

While marketplace conditions for hotels may not seem ideal, challenges often unfold into opportunities. Threats to the hotel industry allow for new ways to increase resiliency so you and your organization can thrive no matter the conditions.

Let’s examine two key risks that could significantly impact the hospitality industry and how we can help address them.

Changing statute of limitations

As with many industries, changing regulations can be disruptive if not prepared. Staying ahead of hotel regulations and laws is a crucial component of hotel risk management.

One key development that has profoundly impacted the hotel industry is the changing statute of limitations related to the Child Victims Act and the Adult Survivors Act. Many states have revised or eliminated these limitations, allowing victims of abuse to file claims against hotels for incidents that occurred in the past. This has led to a surge in claims and legal actions against hotels, exposing them to significant financial and reputational risks. This includes claims related to child abuse, sexual assault, and human trafficking.

As a result, hotel clients must have robust insurance coverage to protect against these claims and mitigate the financial and reputational damage they can cause. Beyond insurance, hotels also need to have effective risk management guidelines, tools, and resources in place to make any possible future claims scenarios easier to navigate.

Navigating hotel regulations and laws can sometimes be a challenging task, but this is a particular area where having a knowledgeable partner can make all the difference.

Insurance carrier actions

As mentioned, many insurance carriers have responded to the changing landscape by exiting the hotel liability space, reducing their capacity, or imposing limitations on coverage. This has left hotel owners and operators with limited options for obtaining comprehensive insurance coverage that adequately addresses their unique risks. The reduction in available coverage and capacity has created limited markets, which has driven up insurance costs for hotel clients, making it more challenging to secure suitable coverage.

Our solutions

From the risks we just discussed to natural disasters and data breaches, threats to the hotel industry are broad and require effective hotel risk assessment and risk management. Fortunately, that’s where we come in. Marsh McLennan Agency offers a range of solutions to help hotel clients navigate the evolving insurance landscape and effectively manage their risks.

Industry Expertise

We have a team of insurance professionals with deep knowledge and experience in the hotel industry. From boutique hotels to large franchise-based operations, we understand the specific risks and challenges the hotel and hospitality industry faces and can provide tailored insurance solutions to address specific needs.

Proprietary programs and key market relationships

We developed proprietary insurance programs specifically designed for the hotel industry. These programs leverage our strong relationships with key insurance markets to provide clients with access to comprehensive coverage options at competitive rates.

Benchmarking and analytics

We utilize advanced benchmarking and analytics tools to assess a client's risk profile and identify areas of vulnerability. By analyzing industry data and trends, we can help clients make informed decisions about their insurance coverage and risk management strategies.

Contractual risk management transfer expertise

We have extensive experience in contractual risk management transfer, helping hotel clients navigate complex contractual agreements and ensure that their insurance coverage aligns with their contractual obligations. This expertise can help clients avoid potential gaps in coverage and minimize their exposure to liability.

The insurance landscape for the hospitality industry has changed dramatically in recent years, exposing it to extreme risks and uncertainties. As previously discussed, the changing statute of limitations and actions of insurance carriers have created significant challenges for hotel owners, managers, and developers. The good news is that our Hotel & Hospitality Industry Practice is well-equipped to assist hotel clients in navigating these changes and finding comprehensive insurance solutions.

With industry expertise, proprietary programs, benchmarking and analytics capabilities, and contractual risk management transfer expertise, we can help hotel clients effectively manage their risks and mitigate emerging threats to the hotel industry.

We are committed to partnering with organizations to navigate these challenges and empower thriving, resilient workforces for the future. This year’s Business Insurance Trends report examines impactful trends such as inflation, regulatory and cyber risk, and more that could affect your organization. We’re here to help you overcome the climate of uncertainty and remain resilient.  

Contact a Marsh McLennan Agency hotel industry specialist today to learn more about how we can help.


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Stephen McCord

Executive Vice President, Business Insurance, Real Estate & Hospitality