The Hidden Risk in Hotel Construction
Renovating or expanding a hotel is exciting but it carries serious financial risks. For hospitality businesses in Cincinnati, Ohio, and across Kentucky and Indiana, one overlooked policy detail could mean millions in uncovered losses.
The Ohio Supreme Court recently ruled that damages caused by defective subcontractor work were not covered by a standard commercial general liability (CGL) policy. This case affecting a luxury hotel and conference center at Ohio Northern University left more than $6 million in damages excluded from coverage.
These ruling highlights a critical point: general liability insurance may not protect you during hotel construction or renovation.
Why General Liability May Not Be Enough
While CGL insurance covers bodily injury and property damage claims, it often excludes:
- Subcontractor construction defects
- Faulty workmanship claims
- Damage caused by poor installation or design
This means if a subcontractor makes a costly mistake, your hotel may pay for repairs out-of-pocket.
Renovation = Increased Risk
Hotels undergoing renovations face higher exposures, such as:
- Structural damage during construction
- Fire, flooding, or water damage from contractor errors
- Lost revenue from closed rooms or facilities
Without additional coverage, a single incident could devastate a hospitality business.
Key Coverages to Protect Hotel Projects
- Builders Risk Insurance
Protects property under construction or renovation, including fire, theft, vandalism, and accidental damage. Look for policies that specifically cover subcontractor work.
- Updated Property Insurance
Renovations can significantly raise your property’s value. If you don’t update your coverage, you may be underinsured when you need to file a claim.
- Enhanced General Liability with Endorsements
Endorsements can extend protection to subcontractor-related defects. Working with an experienced broker ensures you close these gaps before work begins.
Protecting Hotels from Financial Surprises
Imagine investing millions in a Cincinnati hotel renovation only to discover your insurance won’t cover damages from a subcontractor’s faulty plumbing.
At Covella Insurance Partners, we work with hotels, motels, resorts, and B&Bs across Ohio, Kentucky, and Indiana to:
- Review exclusions that may leave you exposed
- Recommend builders risk and liability solutions for renovations
- Update property policies to reflect increased values
- Provide tailored hospitality risk management strategies
Secure Your Hospitality Coverage Today
Renovations are an investment in your future don’t let insurance gaps put that future at risk.
Contact Covella Insurance Partners today to review your policy and get a free consultation. We’ll ensure your Cincinnati, Louisville, or Indianapolis hospitality business is fully protected.
Call us now at (513) 489-6422, email info@covellains.com, or click here to get a quote.