Business income loss: is your hotel prepared to file a claim?

A hotel interruption affects more than room revenue. Canceled events, lost food and beverage sales, continuing expenses, and the work of reopening can all become part of the financial picture.

Business income coverage may respond when a covered event interrupts operations, subject to the policy’s terms. A reduction in revenue alone does not establish coverage, and lost sales are not necessarily the same as the insured loss. Review the applicable coverage, exclusions, limits, waiting period or deductible, and covered time period with your insurance team. Travelers’ coverage guide explains these distinctions.

Know the reporting process before a loss

Identify who will notify the insurer, coordinate with the adjuster, and gather records from hotel operations and finance. Keep the policy and reporting contacts accessible outside the property.

After a loss, follow the policy’s notice requirements promptly. Do not wait to assemble a complete financial package before seeking help with reporting. Ask the adjuster what information is needed and when it should be provided.

Build a record of normal operations

Historical records help establish how the hotel was performing before the interruption. Useful starting points include:

• Income statements, balance sheets, tax records, and budgets prepared before the loss.
• Occupancy, average daily room rates, reservations, and event bookings.
• Revenue records for restaurants, banquets, spas, retail, and other operations.
• Payroll, recurring operating expenses, and significant customer or vendor contracts.

Keep prior periods available, and confirm the time span requested for the particular claim. Explain seasonal patterns and material changes in operations rather than relying on one recent month as the baseline.

Track the interruption as it happens

Maintain a dated record of closures, partial operations, cancellations, repairs, and reopening milestones. Preserve invoices and receipts, and track continuing expenses and additional costs separately.

Record how estimates were developed and keep the information supporting them. An expense or revenue loss appearing in your records does not mean it is automatically covered; your insurance team and adjuster will need to assess it under the policy.

Keep one organized claim file

Retain copies of submissions, correspondence, outstanding requests, and the dates information was provided. Assign someone to keep the file current so operations, finance, and the claim team are working from consistent records.

Want to prepare before an interruption occurs? Talk with our Hospitality team about your coverage and claims-readiness process.