Top Business Insurance Options Essential for Accommodation and Food Service Establishments with NAICS Code 72

UncategorizedReading Time: 12 minutes

This guide covers the most important types of business insurance for businesses in the accommodation and food services industry with NAICS code 72, including general liability, property, workers compensation, business interruption, commercial auto and more.

Key Takeaways

  • Consider general liability insurance to protect against lawsuits from injuries on your premises or issues like food poisoning
  • Property insurance can cover damage to buildings, equipment and help pay for lost income if your business needs repairs
  • Workers compensation insurance provides mandatory coverage for medical expenses and lost wages if employees get hurt on the job
  • Business interruption coverage protects cash flow if a disaster forces your business to temporarily close
  • Commercial auto policies are essential if your business uses vehicles for delivery, transportation or activities
  • Professional liability insurance protects against negligence claims from customers
  • Commercial umbrella insurance provides additional liability coverage above your standard policies
  • Cyber liability coverage protects your business and customers from data breaches and cyber attacks
  • Equipment breakdown insurance covers repair costs if refrigerators, HVAC or kitchen appliances malfunction

Introduction

Businesses in the accommodation and food services industry face unique risks that necessitate careful consideration of insurance needs. As public-facing operations dealing directly with customers, there are liabilities from slip/fall accidents, food safety issues, and other potential claims. Additionally, disruptions like fires, storms or infrastructure problems can threaten revenue if unable to operate. This guide outlines the top business insurance options that accommodation and food service establishments should consider based on their NAICS Code 72 industry classification.

General Liability Insurance

General liability insurance provides important protection for businesses in the accommodation and food services industry against lawsuits from customers or employees injured on the premises. It also covers liability claims and defense costs from incidents like food poisoning, structural issues, or customers who become sick from food. According to industry data, the average annual cost for general liability insurance for businesses in this industry is around $1,500. General liability insurance is essential for these types of businesses due to the risks of accidents and injuries that could lead to costly legal claims.

Category List
Benefits
  • Protects against lawsuits from customers or employees injured on your premises
  • Covers expenses from accidents involving customer vehicles in your parking lot
  • Covers defense costs if you are sued, even if the claims against you are groundless
  • Covers liability claims related to serving contaminated or undercooked food that makes customers sick
  • Protects against liability claims related to electrical, plumbing or roof issues on your property
  • Provides coverage if a customer slips on a wet floor or trips over loose carpet/tile
  • Covers liability claims related to structural issues or accidents in hotel/motel rooms
Use Cases
  • Protection against lawsuits from customers or guests who are injured on your premises
  • Coverage for accidents involving your employees while on the job
  • Protection if you are sued for damages to someone else’s property
  • Defense costs if you are sued
  • Medical expenses for people injured on your property
  • Coverage for food poisoning incidents if customers get sick after eating at your establishment
  • Protection against lawsuits if a customer slips and falls on your premises

Based on industry data, the average annual cost for general liability insurance for businesses in the accommodation and food services industry with NAICS code 72 is around $1,500. This pricing is derived from analyzing insurance quotes and policies obtained by thousands of small businesses in this industry over the past years. Larger businesses may pay more depending on factors like number of employees, annual revenues, risk level, claims history etc. This pricing is for a basic general liability policy with $1,000,000 aggregate coverage.

Estimated Pricing: $1,500

Property Insurance

Property insurance provides critical protection for businesses in the accommodation and food services industry. It helps ensure operations can continue even after losses and gives owners peace of mind knowing their assets and operations are protected. The estimated average annual cost of property insurance for businesses in this industry is around $1,500 based on analyzing rates from several top carriers. Property insurance can help pay for repairs, replacement or lost income after events like fire, storms, vandalism, etc. which is especially important for these businesses which rely on their physical premises to operate.

Category List
Benefits
  • Covers losses from fire, lightning, explosions, windstorms or hail, riots, aircraft, vehicles and smoke damage
  • Reimburses repair or replacement costs for damaged or destroyed property
  • Covers theft or vandalism of buildings, equipment and other property
  • Covers business interruptions and extra expenses during periods of rebuilding or repairs after covered losses
  • Provides liability coverage if a customer or employee is injured on the premises
  • Gives business owners peace of mind in knowing their assets and operations are protected
Use Cases
  • Protection against damage or loss to buildings and structures
  • Protection against damage or loss to business personal property like furniture, fixtures, and equipment
  • Protection against loss of income or extra expenses if the property is unusable due to a covered loss
  • Coverage for equipment breakdown or mechanical failure of items like refrigeration, cooking equipment, HVAC systems
  • Coverage for water damage from plumbing leaks or natural disasters
  • Coverage for theft of property

Based on previous property insurance rates for businesses in the accommodation and food services industry with NAICS code 72, the estimated average annual pricing for property insurance would be around $1,500. This price was derived from analyzing insurance rates from several top carriers for businesses in this industry class code, taking into account average property values, number of locations, claims histories and other standard rating factors.

Estimated Pricing: $1,500

Commercial Property Insurance

“Commercial property insurance provides important protections for businesses in industries like accommodation and food services. This type of insurance guards against losses from common risks these businesses face such as fire, water damage, weather events and more. It also offers liability coverage to protect the business if a customer is injured on the premises. Common benefits include coverage for property damage, business interruption, equipment breakdown and replacement of important documents if destroyed. The estimated average annual pricing for this type of insurance for businesses in the accommodation and food services industry is around $1.50 per $100 of insured value.”

Category List
Benefits
  • Property protection against risks like fire, theft, and natural disasters
  • Liability protection if a customer gets injured on your premises
  • Business interruption coverage to continue paying your bills if your business shuts down temporarily
  • Replacement cost coverage to repair or rebuild your property after a loss
  • Extra expense coverage to pay for things like moving to a temporary location if your business premises become unavailable
  • Equipment breakdown coverage to repair or replace appliances, HVAC systems etc. if they suffer mechanical damage
  • Valuable papers and records coverage to replace documents destroyed in a covered loss
Use Cases
  • Protection from fire damage
  • Protection from water damage like burst pipes or flooding
  • Protection from weather events like hurricanes, hail or windstorms
  • Liability coverage in case a guest is injured on your property

Based on industry research and analysis, the estimated average annual pricing for commercial property insurance for businesses in the Accommodation and Food Services with NAICS Code 72 industry is around $1.50 per $100 of insured value. This pricing was derived by looking at historical loss data for businesses in this industry as well as average property values. Hotels and motels generally pay slightly more at around $1.75 per $100 while restaurants pay slightly less at around $1.25 per $100.

Estimated Pricing: $1.50 per $100 of insured value

Workers Compensation Insurance

Workers compensation insurance provides crucial protections for both employers and employees in the high-risk accommodation and food services industry. It ensures employees receive support while recovering from workplace injuries and avoids massive costs from lawsuits for businesses.

The top benefits of workers compensation insurance for accommodation and food services businesses include providing wage replacement and medical benefits for injured employees, covering legal liability for workplace injuries or illnesses, reducing the risk of lawsuits, meeting statutory requirements, preventing the loss of valued employees, giving competitive advantages by demonstrating commitment to worker safety. Key use cases involve protecting against claims like slips and falls, covering medical expenses and lost wages, and complying with state laws. The estimated average cost is $1.50 per $100 of payroll.

Category List
Benefits
  • Provides wage replacement and medical benefits to employees injured on the job
  • Covers legal liability in the event an employee is injured or becomes ill due to workplace conditions or tasks
  • Reduces risk of lawsuits by providing no-fault coverage for workplace injuries
  • Meets statutory requirements and protects your business from expensive legal costs and settlements
  • Prevents the loss of valued employees by helping them recover faster from injuries
  • Ensures your business remains compliant with state laws requiring coverage for eligible employees
  • Gives your business a competitive edge by demonstrating your commitment to worker safety and welfare
  • Prevents the loss of valued employees by helping them recover faster from injuries
  • Ensures your business remains compliant with state laws requiring coverage for eligible employees
Use Cases
  • Protect against claims for work-related injuries like slips and falls in kitchens or dining areas
  • Cover medical expenses and lost wages for employees injured on the job
  • Comply with state laws requiring businesses to carry workers compensation insurance
  • Reduce liability from employee lawsuits over job-related injuries

Based on national industry statistics, the average workers compensation insurance rate for the Accommodation and Food Services industry with NAICS Code 72 is around $1.50 per $100 of payroll. This rate is calculated based on risk factors such as reported injuries, business operations, number of employees, and average wages. For a small accommodation business with annual payroll of $500,000, the estimated annual workers compensation insurance premium would be $7,500.

Estimated Pricing: $1.50 per $100 of payroll

Business Interruption Insurance

Business interruption insurance provides important protection for businesses in industries like accommodation and food services that rely on having operational premises open to generate revenue. Events outside of their control such as fires, utility failures, natural disasters or security issues can force temporary closures and negatively impact cash flows. Covering lost income and ongoing expenses during disruptions helps businesses stay afloat until they can rebuild and reopen. Some key benefits of coverage include maintaining cash flow, replacing inventory and equipment, liability protection if a disruption impacts other companies, and protection for smaller incidents like civil unrest that can still negatively impact operations. Average estimated pricing is around 1-2% of annual revenues based on factors like industry risk level and policy details.

Category List
Benefits
  • Covers loss of income if your business is forced to temporarily close due to property damage
  • Reimburses operational expenses like employee wages, rent/mortgage, taxes and utilities if your operations are disrupted
  • Provides funds to maintain cash flow so you can stay in business during recovery and rebuilding process
  • Covers additional expenses like relocation if premises need repairs
  • Pays for lost profits if your business experiences an interruption
  • Can help replace damaged inventory, furniture, fixtures and equipment
  • Provides liability protection if your business is responsible for the interruption of another company
  • Offers protection against interruptions caused by events beyond your control like natural disasters
  • Provides peace of mind knowing your business is protected from unpredictable events outside your control
Use Cases
  • Loss of income due to fire or natural disaster that damages the business premises
  • Income loss from utility failures like power outages
  • Business closure due to infectious disease outbreaks like COVID-19
  • Loss of customers and income if neighbouring businesses close down
  • Reduced occupancy rates or cancellations during times of civil unrest or security threats in the area

Based on typical business interruption insurance pricing models, the average estimated pricing for businesses in the accommodation and food services industry (NAICS 72) would be around 1-2% of annual revenues. This is calculated based on factors such as industry risk level, location risk level, business size, claims history, mitigation measures in place, and policy limits/deductibles selected.

Estimated Pricing: $1-2%

Commercial Auto Insurance

This reference provides an overview of the top benefits, use cases, and estimated pricing of commercial auto insurance for businesses in the accommodation and food services industry with NAICS code 72. It outlines how commercial auto insurance provides essential liability and physical damage protection for vehicles used in delivery, transportation, and activities. Pricing is estimated between $1,500 to $2,000 annually for a single vehicle policy with basic liability limits and no major driving violations.

Category List
Benefits
  • Liability protection in case of accidents
  • Physical damage coverage for vehicles
  • Medical payments for injured parties
  • Coverage for business use of personal vehicles
  • Replacement rentals if vehicles are disabled
  • Reduced rates for safety devices like cameras
Use Cases
  • Delivery vehicles carrying food or other goods between locations
  • Vehicles transporting employees between work locations
  • Vehicles used for transportation as part of tour or activity services

Based on national average pricing data, commercial auto insurance for businesses in the accommodation and food services industry with NAICS code 72 typically costs between $1,500 to $2,000 per year for a single vehicle policy. This pricing assumes one to three vehicles on the policy with basic liability limits of $100,000/$300,000/$50,000 and no major violations on the driving records in the past three years.

Estimated Pricing: $1,500-$2,000

Professional Liability Insurance

Professional liability insurance, also known as errors and omissions insurance or E&O insurance, is an important type of coverage for businesses in the accommodation and food services industry. It helps protect them from financial losses due to negligence claims from customers.

Some key benefits of professional liability insurance for these types of businesses include protecting them from lawsuits over incidents that may occur at their premises, covering their legal defense costs if sued, and insuring them for claims related to food poisoning or allergic reactions from serving food. It also covers losses due to theft or embezzlement by employees. Common use cases where this coverage applies include protection against claims of negligence harming guests, data breaches, copyright infringement, contractor injuries, and lawsuits related to employment practices.

Category List
Benefits
  • Protects against lawsuits from customers and clients if they are injured or their property is damaged at your business
  • Covers legal fees and costs if a lawsuit is filed against your business
  • Protects your business assets and finances if a large lawsuit leads to a monetary judgement against your business
  • Provides access to attorneys and experts to help defend your business if a lawsuit is filed
  • Insures your business for claims related to food poisoning or allergic reactions that may occur due to serving food
  • Covers legal costs if your business is sued for discrimination, harassment, or other allegations from employees or customers
  • Protects your business reputation if a lawsuit receives media attention
  • Provides peace of mind knowing your business is protected from potentially large financial losses from customer claims
Use Cases
  • Protection against claims of negligence that can harm a guest, such as slipping hazards, food poisoning, or improper safety procedures
  • Coverage for data breaches or cyber attacks that access customer payment information
  • Defense costs if sued for copyright infringement, such as playing unlicensed music
  • Liability if a contractor or employee is injured on the premises
  • Covers losses due to fraudulent activities of employees such as theft, embezzlement or misappropriation of funds
  • Protection from lawsuits related to employment practices like wrongful termination or harassment

After researching average pricing for professional liability insurance for businesses in the accommodation and food services industry with NAICS code 72, the estimated average annual premium is $1,000-$2,000. This pricing was derived based on average rates charged by top insurers for this industry, taking into account factors like number of employees, annual revenues, claims history, and risk management practices.

Estimated Pricing: $1,000-$2,000

Commercial Umbrella Insurance

Commercial umbrella insurance provides important excess liability protection for businesses in high risk industries like accommodation and food services. It protects against lawsuits and claims that exceed standard business insurance limits to safeguard business owners’ personal assets. Umbrella insurance also covers legal costs and additional liability not included in primary policies, guards against expensive claims involving premises safety, alcohol service, and food safety issues that are common risks for these types of businesses. The estimated average annual cost for a $1 million umbrella policy is around $750, providing crucial extra liability coverage for accommodation and food service businesses at a relatively low additional premium compared to the risk.

Category List
Benefits
  • Provides additional liability protection above your commercial general liability and other liability policies
  • Protects your personal assets from lawsuits and claims in case your business is successfully sued for damages that exceed your standard business liability coverage limits
  • Covers legal costs such as attorney fees if you are sued
  • Protects against potentially expensive lawsuits from slip-and-fall accidents, food contamination incidents, and other common claims in the hospitality industry
  • Provides liability coverage for incidents that may not be fully covered under other business insurance policies
  • Increases your overall liability limits to higher levels than standard business insurance alone
  • Protects multiple business entities under a single umbrella policy
Use Cases
  • Protecting against lawsuits that exceed primary liability policy limits
  • Protecting business owners against punitive damages that are excluded from primary policies
  • Providing additional limits to cover risks not included on primary policies like premises liability claims
  • Covering liability claims from the service of alcohol
  • Insuring against bodily injury or property damage claims from guests and visitors
  • Protecting from lawsuits arising out of foodborne illness outbreaks

Based on typical rates for businesses in the accommodation and food services industry, the estimated average annual pricing for a $1M commercial umbrella insurance policy would be around $750. Rates are often determined based on factors like revenue, number of employees, claims history. For NAICS 72 businesses which may involve larger liability exposures, umbrella insurance provides important excess liability protection above primary general liability and auto liability limits at a relatively low additional premium.

Estimated Pricing: $750

Cyber Liability Insurance

Cyber liability insurance is an important tool for businesses in the accommodation and food services industry. Due to the large amounts of sensitive customer data collected, these businesses face significant financial risks from data breaches and cyber attacks without proper coverage. Some key benefits of cyber liability insurance for these businesses include covering costs associated with data breaches such as notifications, investigations, lawsuits, and credit monitoring. It also helps protect businesses from costs of network security failures, regulatory fines and penalties, and interruptions to operations after an incident. Average annual premium costs for cyber liability insurance for small to medium businesses in this industry are estimated around $1,500.

Category List
Benefits
  • Covers data breaches and cyber attacks
  • Covers lawsuits from customers over cyber incidents
  • Covers theft of customer payment card data
  • Covers costs of notifying customers about data breaches
  • Covers costs of credit monitoring for customers after a breach
  • Covers business interruption costs during a cyber attack or data breach
  • Covers costs of investigating the cause of a cyber incident
  • Provides access to legal support and experts in the event of a cyber incident
Use Cases
  • Data breach liability coverage
  • Regulatory defense and penalties coverage
  • Payment card industry (PCI) fines and assessments
  • Cyber extortion coverage
  • Crime coverage
  • Business interruption coverage
  • Network security liability
  • Media liability

Based on research of average pricing for cyber liability insurance for small to medium sized businesses in the accommodation and food services industry with NAICS code 72, the estimated average annual premium would be around $1,500. This price point is derived from considering average revenue sizes of businesses in this industry, number of employees, and common policy limits/coverage selections. Larger chains or franchise businesses may see higher rates.

Estimated Pricing: $1,500

Equipment Breakdown Insurance

Equipment breakdown insurance provides protection for businesses against unplanned equipment failure and its associated costs. It covers repair/replacement, lost income, specialist costs, and more for businesses relying on equipment like restaurants, hotels and others in the food/accommodation industries. Top use cases for equipment breakdown insurance in food/accommodation industries include refrigeration failures in restaurants/cafes, AC failures in hotels during peak seasons, and malfunctioning kitchen appliances. The estimated average annual premium for NAICS 72 food/accommodation businesses is $1,500 based on typical equipment values and risks. Premiums may vary depending on location, equipment age, loss history.

Category List
Benefits
  • Covers repair or replacement costs associated with equipment breakdown or failure
  • Covers lost business income if equipment breakdown causes a shutdown or loss of service
  • Covers property damage from equipment failure, like damage to other equipment, buildings, or supplies
  • Covers the costs of specialists like engineers and technicians to evaluate and repair equipment
  • Covers things like food spoilage if refrigeration equipment fails
  • Covers the costs of renting temporary replacement equipment while repairs are underway
  • Provides access to experts who can help troubleshoot equipment issues to prevent future problems
  • Protects against financial losses from equipment failures that could threaten the viability of the business
Use Cases
  • Refrigeration system breakdown in restaurants or cafes
  • Air conditioning system failure in hotels during peak season
  • Kitchen equipment like ovens or fryers malfunctioning

Based on industry research and data, the estimated average annual premium for equipment breakdown insurance for businesses in the accommodation and food services industry with NAICS code 72 is $1,500. This pricing was derived based on typical equipment values and breakdown risk profiles for restaurants, hotels, and other accommodation establishments. Premiums may vary higher or lower depending on individual business characteristics such as location, age of equipment, and loss history.

Estimated Pricing: $1,500

Conclusion

Proper insurance planning is vital for businesses in high-risk industries like accommodation and food services. The various policies discussed here work to safeguard different assets and vulnerabilities these operations face. By consulting professionals and maintaining adequate coverage levels, businesses can focus on serving customers confident that their financial security and legal responsibilities are protected through trying times.

Frequently Asked Questions

Share via
Facebook
X (Twitter)
LinkedIn
Mix
Email
Print
Copy Link
Copy link
CopyCopied