Where the Liability Comes From

Innkeepers have carried a special responsibility for guest property for a very long time. At common law an innkeeper was held to a high standard, close to strict liability, for the goods of a guest. Nearly every state has since modified that by statute, and those statutes are the controlling authority today.\n\nThe modern pattern generally does three things. It caps the innkeeper\'s liability for guest property at a stated amount. It often provides a higher or unlimited exposure for property actually accepted into a safe or safe deposit box. And it conditions the cap on the hotel giving proper notice to guests, usually by posting the statute or a notice of the limitation in a specified manner and location.\n\nThat last condition is where hotels lose protection. The statutory cap is frequently contingent on compliance with the notice requirement, so a property that has not posted the required notice in the required place may face unlimited liability that the statute was written to prevent.

• State innkeeper statutes generally cap liability for guest property
• Caps are commonly conditioned on posting a notice in a specified manner and location
• Property accepted into a safe or safe deposit box is often treated differently and may carry higher exposure
• Requirements vary by state; verify yours with the statute and local counsel

The Coverage That Responds, and the Coverage That Does Not

Here is the structure that surprises operators. A hotel\'s commercial property policy insures the hotel\'s own property. Guest property is not the hotel\'s property, and personal property of others is typically covered only to a small sublimit.\n\nGuest property exposure runs through liability coverage, not property coverage, and specifically through innkeepers legal liability, which is sometimes available as an endorsement to a general liability or package policy and sometimes as a standalone coverage. It responds when the hotel is legally liable for loss of or damage to a guest\'s property.\n\nWithin that there are distinctions. Safe deposit box legal liability addresses property specifically accepted into a safe or box, which is often the largest single exposure because that is where guests put valuables. Garagekeepers coverage addresses guest vehicles in your care, custody, or control, which matters for any property with valet parking and is a different coverage from your own auto policy.

• Commercial property insures your property; guest property is a liability exposure
• Innkeepers legal liability is the coverage built for guest property claims
• Safe deposit box legal liability addresses valuables accepted for safekeeping
• Garagekeepers coverage addresses guest vehicles in valet operations
• Watch the care, custody, or control exclusion in general liability forms

Valet Parking and Guest Vehicles

Valet operations deserve separate attention because the exposure is larger and more frequent than guest room property.\n\nWhen your employee takes the keys, you have accepted custody of a vehicle that may be worth more than the furniture in several rooms. Damage during parking, theft from the vehicle, theft of the vehicle, and liability for an accident while your employee is driving it all fall on your program. Garagekeepers coverage addresses damage to the vehicle in your care. Your commercial auto liability addresses liability arising from operating it. Both need to be in place, and limits should reflect the actual vehicle values at your property, which at a luxury or resort hotel can be substantial.\n\nIf valet is outsourced to a third party operator, the contract controls. Require the operator to carry garagekeepers and auto liability at specified limits, name the hotel as an additional insured, provide primary and non contributory coverage, and indemnify the hotel. Then verify the certificates rather than filing them.

• Garagekeepers covers damage to guest vehicles in your care; auto liability covers operating them
• Set limits against actual vehicle values at your property
• For outsourced valet, require garagekeepers, auto liability, additional insured status, and indemnity
• Verify certificates annually and after any change of operator

Review Your Hospitality Program

If you are not certain what your innkeepers, safe deposit box, and garagekeepers limits are, or whether your notice posting is current, those are quick items to confirm and easy ones to have wrong. We work with hotel owners, operators, and management companies and are glad to review the full program with you. Schedule a time at calendly.com/grandbayfinancial.\n\nThis article is for general information and is not a substitute for policy language or professional advice.