Hospitality & Lodging Insurance Packages

A café's biggest exposure is its fit-out and a slip on a wet floor. A bar's is what happens after a patron leaves. A hotel's is the building, the guests sleeping in it and the property they bring. The program has to follow the business you actually run, including the side lines: the restaurant that caters, the inn with a licensed dining room, the resort with a beach.

Most hospitality programs start from a package policy, with specialty coverages added where the package falls short.

Canadian courts have held for decades that a business serving alcohol owes a duty of care beyond the bar. In Jordan House Ltd. v. Menow, [1974] SCR 239, the Supreme Court of Canada held that a hotel that served a patron to intoxication had a positive duty to see that he got home safely. In Stewart v. Pettie, [1995] 1 SCR 131, the Court extended a commercial host's duty to third parties, such as other road users, who might be harmed by an intoxicated patron. The establishment in Stewart was not found liable on its facts, because staff reasonably expected a sober companion to drive.

That is why liquor claims are won or lost on evidence: what was served, by whom, what signs of intoxication staff saw and what they did about it.

Liquor liability limits should reflect the worst case, which for a bar is an impaired driving crash with serious injuries. Our liquor liability insurance page explains how the coverage works, and caterers and venues serving at private events should read the event section of their contracts closely, because clients and venues often set minimum limits and require additional insured status.

Cooking fires are the defining property risk of a commercial kitchen. Grease builds up in hoods, filters and ductwork, and a flare-up on the line can travel into the duct and through the building. In a plaza, one restaurant fire can close every unit.

In Ontario, the Fire Code (O. Reg. 213/07) requires a cooking operation producing smoke or grease-laden vapours to have an exhaust system and fire protection system in accordance with NFPA 96, Standard for Ventilation Control and Fire Protection of Commercial Cooking Operations, and requires those systems to be maintained in accordance with NFPA 96. Instructions for manually operating the fire protection system must be posted conspicuously in the kitchen. Other provinces adopt comparable requirements through their own fire codes.

Underwriters translate those rules into questions, and a clean answer to each one improves both acceptance and price:

A missed cleaning or an unserviced suppression system is more than a fire risk. If a policy carries a protective safeguards condition, it can affect how a claim is handled. Keep the paperwork.

A walk-in cooler that fails overnight can destroy days of stock. Spoilage cover pays for stock lost to refrigeration breakdown or a power failure, and equipment breakdown pays to repair the unit. Check whether the policy covers off-premises power failure, which is common after storms, and whether there is a waiting period before spoilage cover applies.

Contamination is the other side of food risk. In Ontario, the Food Premises regulation (O. Reg. 493/17) requires potentially hazardous food to be held at 4°C or lower, or 60°C or higher, outside short preparation periods. It also requires every food service premise to have at least one food handler or supervisor who has completed food handler training on site during every hour it operates.

A guest who becomes ill after a meal brings a bodily injury claim, which is handled under the products and completed operations part of CGL. Some business interruption policies can be extended to cover closure by a public health authority or loss of income after a contamination event, but these extensions are often sublimited and not included by default. Ask for them by name.

Hotels, motels, inns and B&Bs hold their guests' belongings, and the law treats innkeepers differently from other businesses. In Ontario, the Innkeepers Act limits an innkeeper's liability for loss of or damage to goods a guest brings to the inn to $40, but the limit does not apply where the goods were stolen, lost or damaged through the wilful act, default or neglect of the innkeeper or an employee, or where the goods were deposited expressly for safe custody with the innkeeper.

The protection comes with conditions. The innkeeper must keep a copy of section 4 conspicuously posted in the office, the public rooms and every bedroom, and only gets the benefit of the limit for goods brought in while it is posted. An innkeeper who refuses to accept goods for safe custody, or whose default prevents a guest from depositing them, loses the benefit of the Act for those goods. The Act also gives an innkeeper a lien over a guest's goods for unpaid food or accommodation, with rules on sale.

Other provinces have their own innkeepers' statutes with different limits and conditions, so the notice in a hotel in one province is not the right notice in another.

Most hospitality liability claims are ordinary injuries: a wet entrance in January, a spill on the dining room floor, a loose stair tread, a fall on an icy patio or parking lot. In Ontario, the Occupiers' Liability Act requires an occupier to take reasonable care to see that people entering the premises, and the property they bring, are reasonably safe, whether the danger comes from the condition of the premises or an activity carried on there.

Pools, hot tubs, beaches and rental equipment add to that duty at hotels and resorts. Insurers want to see written inspection and maintenance logs, snow and ice records, signage and supervision rules. If your snow removal is contracted out, the contract should require the contractor to carry liability insurance naming you as an additional insured, and you should hold a current certificate of insurance.

Restaurant tenants usually owe their landlord CGL at a stated limit. Our post on the commercial lease insurance clause explains what to check before you sign.

Seasonal lodges, patios, ice cream stands and cottage-country restaurants close for months at a time. Most property policies restrict coverage once a building has been vacant or unoccupied beyond a set period, commonly 30 consecutive days, and a shutdown with the heat off and nobody checking can turn a frozen pipe into an uninsured loss. Tell your broker your season in advance and agree the conditions in writing. Our guide to how the 30-day vacancy clause works covers the wording and the steps that keep a closed building insured.

For year-round operators, the bigger risk is the closure after a loss. A restaurant that loses its kitchen can be shut for months while it is rebuilt and re-inspected, and staff may not wait. Set the business interruption indemnity period to a realistic rebuild, re-inspection and reopening timeline, insure key payroll if you want to keep your team, and add extra expense cover for temporary arrangements.

Hospitality employs many people, often young, part-time and seasonal, which shapes the rest of the program.

Property is priced per $100 of insured value using what underwriters call COPE: construction, occupancy, protection and exposure. In hospitality, occupancy does most of the work. A cooking operation with deep fryers sits in a very different class from a café that only reheats, and a nightclub sits apart from a family restaurant. Liability is usually rated on annual sales, with liquor sales and the share of revenue from alcohol rated separately. Hotels are rated on rooms and amenities.

Market conditions currently favour buyers on property. Marsh's Global Insurance Market Index put Canadian commercial property rates down 8% in the third quarter of 2026, and overall commercial rates down 6%. Liquor-heavy accounts and older wood-frame lodging still find fewer willing insurers.