A Recipe for Success Through a Hard Insurance Market for Hospitality Businesses

busy restaurant hard insurance market
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Hospitality has been one of the most impacted industries by the COVID-19 pandemic. In fact, almost four in 10 of all the U.S. jobs lost since last February haven been in the leisure & hospitality industry, according to a 2021 Department of Labor (DOL) national jobs report—triple the number of the next-hardest-hit industry and accounting for 39%1 of all jobs lost to pandemic.

As hospitality businesses continue on the road to recovery post-pandemic, rebuilding operations and generating income are not the only challenges they face as many industry-specific operational risks remain. Insurance coverage to protect organizations against the financial impact of those risk exposures is a large expense in any business budget and today’s hard insurance market is going to keep the financial pressure on recovering businesses. Getting through this challenging time requires hospitality businesses to have present themselves in the best possible light to enable  their brokers to present the best-case scenario to insurers. This means that in partnership with your insurance advisor, demonstrate to the marketplace why they should want your business (i.e., a good loss history and corrective measures taken to prevent similar losses from reoccurring, proactive risk management/transfer practices, proper safety protocols, and property upgrades.)

In layman’s terms, a hard insurance market is the upswing in a market cycle when insurance premium rates are escalating, and insurers are disinclined to negotiate terms. Underwriting standards tighten and insurers closely monitor insurance rates and manage coverage capacity. Through the remainder of 2021 and beyond, insurance buyers will continue to feel the effects of the hard market in the hospitality industry.

Underwriting losses, poor industry results, decline in investment income due to lower interest rates, an increase in natural disaster claims, social factors, such as “social inflation” of claims and ‘once-in-a-century events such as COVID-19, are all factors directly contribute to the state of the market.

On the property insurance side, water damage and catastrophic weather events have been costly for insurers while on the liability side, increasing claims for slips and falls, have led to expensive lawsuits. Some companies have stopped offering hospitality insurance, exiting the space, and resulting in fewer players in the market. The economic fallout from the global pandemic includes lower interest rates, pushing premiums higher yet again as insurers can’t rely on investment behind the scenes to remain profitable. Additionally, concern relating to COVID-19 related liability claims is tightening the market even further.

  • DAVO Sales Tax
  • Imperial Dade
  • Simplot Frozen Avocado
  • RATIONAL USA
  • Red Gold Sacramento
  • Atosa USA
  • RAK Porcelain
  • Texas Pete
  • AyrKing Mixstir
  • T&S Brass Eversteel Pre-Rinse Units
  • BelGioioso Burrata
  • Inline Plastics Safe-T-Chef
  • Day & Nite
  • McKee Foodservice

So, what can hospitality businesses do?

Within such an environment, underwriters carefully review submissions, questioning and reviewing every detail of information on the application. Together, with your insurance broker, work towards a professional submission that highlights the strengths of your risk management efforts.

Completing an insurance review and gathering information takes time. Here is what you can do to improve your situation in this hard market:

  • Be Proactive: Providing your updated information to your broker early in the renewal process will allow you to obtain your renewal terms sooner and address options with your broker.
  • Be Complete: Insurance underwriters have limited time to go back and forth with your broker requesting missing information – assist by ensuring your file is complete.
  • Be Current: Improve maintenance, implement Risk Services recommendations, undergo an operational evaluation – underwriters favor and value clients that take care of their business.

These are just some of the ways you can get ahead of rising premium costs and navigate the current state of the insurance market. Now more than ever, it is imperative to work with your insurance advisor to review your coverages and to understand what your P&C policies cover, what they don’t and the best ways to mitigate the individual and unique risks of your properties.


  1. https://www.bls.gov/news.release/empsit.nr0.htm

  • Red Gold Sacramento
  • Simplot Frozen Avocado
  • Texas Pete
  • RAK Porcelain
  • Atosa USA
  • McKee Foodservice
  • BelGioioso Burrata
  • T&S Brass Eversteel Pre-Rinse Units
  • Inline Plastics Safe-T-Chef
  • RATIONAL USA
  • AyrKing Mixstir
  • Day & Nite
  • DAVO Sales Tax
  • Imperial Dade