Hotels, Restaurants See Favorable Property Market But Casualty Still Challenging: Report
By Andrea Wells
The hospitality market has become a bit of a “tale of two markets,” according to Dana Fansler, AIM, AINS, AVP and Program Manager, Amwins Program Underwriters.
“Property insurance has softened considerably, with increased capacity, broader terms, and rate reductions for many well-performing hotels,” Fansler said. Casualty’s tale tells a much different story, she added. “Casualty remains challenged due to social inflation, nuclear verdicts and increased litigation,” she told Insurance Journal. “As a result, insurers are becoming much more focused on what they’re covering rather than simply how much premium they’re collecting.”
According to Amwins’ recent State of the Market: A focus on Hospitality report, due to increased global and domestic capacity, coupled with a 2025 storm season with no hurricanes making landfall in the continental U.S., pricing and terms have become increasingly competitive on the property side.
“Hotels and hospitality properties in favorable geographies are commonly achieving premium reductions in the range of 15% to 25%, with some accounts also benefiting from higher available limits. Carriers are returning to classes they had previously avoided, restoring competition that had been lacking during the hard market conditions of the prior decade,” the report said.
Casualty lines in hospitality can be a mixed bag, the report noted. “General liability and liquor liability pricing has softened modestly for certain restaurant, bar, and nightclub risks, but this relief is uneven and often paired with tighter coverage terms,” the report said. Coverage structure is playing a larger role in underwriting outcomes in the hospitality market.
“What that means in practice is that two quotes with similar premiums can have dramatically different coverage structures,” Fansler explained.
For example, she said:
Assault & Battery (A&B) may be fully covered, sub-limited, or excluded.
Abuse & Molestation (A&M/SAM) may have reduced limits or defense inside the limits.
Human Trafficking coverage may be restricted or excluded entirely.
Liquor liability may carry separate sub-limits or exclusions.
“For many hospitality accounts, these coverage terms have become the deciding factor, particularly for hotels and resorts with restaurants, bars, nightclubs, and mixed-use properties where those exposures exist,” Fansler said. “In some cases, buyers are seeing modest rate relief but receiving less coverage than they had before.”
Claims Trends
Slip, trip, and fall claims remain the most significant driver of liability losses for hospitality risks and now routinely produce settlements in the high six- to seven-figure range, the Amwins report said. But other trends that carriers are keeping an eye on are those involving assault and battery (A&B), abuse and molestation (A&B), human trafficking, liquor liability, bed bugs, Legionella, and carbon monoxide exposure.
“Hotels tend to face the most scrutiny around A&B, trafficking, negligent security, guest safety and abuse-related exposure,” Fansler said. “Restaurants generally face fewer trafficking concerns but continue to see intense underwriting around liquor liability, security procedures, late-night operations, and event exposures.” Any risk associated with high alcohol receipts, entertainment, or nightlife components will see the greatest coverage restrictions, she added.
When it comes to A&B, A&M, or anything related to human trafficking, concerns are directly changing both pricing and coverage availability.
“The biggest change is that these exposures have moved from secondary underwriting considerations to primary drivers of carrier appetite,” Fansler said. Historically, many carriers automatically included some level of A&B, abuse, or trafficking-related protection within broader liability programs. “Today, many are applying sub-limits, requiring separate coverage grants, moving defense costs inside policy limits, or excluding certain exposures entirely,” Fansler said. Human trafficking has become a major area of concern as civil litigation and public scrutiny continue to increase, she added.
Fansler recommends that hotel operators seeking coverage for these exposures to:
Invest in documented training programs: Human trafficking awareness training, abuse prevention training, and security awareness procedures.
Strengthen security controls: Key-card access controls, exterior lighting, incident reporting procedures, employee escalation protocols.
Understand your coverage before renewal.
“Many insureds focus on price and limits but fail to review A&B, SAM, trafficking. This is where the real coverage differentiation is,” Fansler said.
‘For many hospitality accounts, these coverage terms have become the deciding factor, particularly for hotels and resorts with restaurants, bars, nightclubs, and mixed-use properties where those exposures exist.’
Emerging Risks
The Amwins report also noted two emerging areas of risks, including THC beverage exposures in some states and rising cyber risks related to point of sale (POS) systems.
Hemp-derived THC beverages are increasingly being served on premises alongside alcohol in bars, restaurants, hotels, and entertainment venues, the report said. “Regulatory treatment varies greatly by jurisdiction, creating compliance challenges and liability uncertainty for operators.”
POS systems present growing exposure in the hospitality sector as well as they become more integrated with reservations, loyalty programs, and inventory systems. “This expanded connectivity has made hospitality businesses a frequent target for cyber threats,” Amwins noted.
3 Things to Consider
Fansler recommends that agents and brokers submitting a hospitality risk pay attention to three key areas during the submission process.
“Don’t just send in applications/submissions,” Fansler said. Tell the story. “A quality submission should explain the risk: what controls are in place, any security procedures and/or life safety measures, management experience, risk transfer, and what kind of prevention efforts are in play.”
Give as much information as possible. “Don’t underestimate the importance of supplemental applications/information,” Fansler said. “The difference between a quote and a declination is often the supporting documentation. A good submission will have five-plus years of loss runs, COPE info, contracts, human trafficking protocols/abuse prevention policies/procedures, safety manuals–to name a few.”
Lastly, start early and keep the focus on coverage, not cost. “Engage markets 60-90 days ahead of renewal dates so that underwriters have time to thoroughly review and negotiate for your insured,” Fansler said. “In today’s hospitality market, a quote that is cheaper may have big coverage gaps. It’s important for the broker to advise their client on the difference between having the right coverages vs. premium savings–especially in the event of a claim.”