Workers’ Compensation in the Hospitality Industry: Your FAQs Answered

Do Hotels need Workers’ Comp Insurance?

Almost every state in the country requires businesses with employees to protect those employees with workers’ compensation insurance. The hospitality industry is no exception. 

That said, there are always variances from state to state and from one type of hotel to another. For instance, if you own a bed and breakfast property and you are the only employee, you may not be required to carry workers’ comp insurance under the law. 

Still, it’s worth purchasing workers’ comp for hotels even if you’re not legally required to do so. After all, your health insurance or property insurance won’t cover medical costs related to a work-related accident or pay a portion of your wages if you can’t work for some time.

What does Workers’ Comp for Hotels cover?

Workers’ comp coverage covers short and long-term medical costs, pays for lost wages, and provides death benefits in the case of an employee dying from a work-related injury.

Let’s break each of those areas down and explain them.

Medical Costs

When an employee is injured on the job and needs medical attention, workers’ compensation will pay the costs of the care. This also goes beyond the initial doctor’s appointment or emergency room costs. It will also pay for medications and treatment over time if they relate to the accident.

Lost Wages

If an employee is injured on the job and unable to work, workers’ compensation will pay a portion of their regular earnings after a specific amount of time has passed. The average is two-thirds of their regular pay, and most states mandate that insurance companies begin paying out after an employee has missed five to seven days of work.

Death Benefits

Workers' comp insurance will pay death benefits if an employee dies from a work-related injury. These come in a couple of different forms. 

First, the insurance will pay at least some of the funeral costs, although the amount varies from state to state. 

Second, the insurance will pay death benefits to the employee’s spouse and dependent children. This is usually only a percentage of the decedent’s income, and it generally lasts until the spouse remarries. Dependents will receive support until they turn 18 (or older if they’re full-time students, depending on the state). 

How does Workers’ Comp for Hotels benefit business owners?

While workers’ comp coverage is primarily designed to protect your employees, it also helps safeguard your business. But how? 

One way is that it helps protect your hotel from liability for employees’ workplace injuries, you won’t have to pay for those injuries out of pocket. It may also significantly reduce the risk of a major financial loss if an employee is injured while performing work-related duties through a lawsuit.

What are the most common risks to Hotel Employees?

While hotels may not seem high-risk, employees face various daily hazards depending on their roles.

These can include:

Slip, trip, and fall accidents

Burns

Respiratory injury due to exposure to cleaning chemicals

Injury from mechanical equipment

Extreme weather

Infectious diseases from waste exposure

Harassment and violence from guests and/or other employees

Repetitive movement injuries

How many job Class Codes do Hotels have?

When it comes to workers' compensation insurance, job class codes are used to categorize employees based on their work's risk level. 

Hotels are unique in that, despite having employees in a wide range of roles, nearly all fall under class code 9052 (hotel operations). The only exception is restaurant employees, who are classified under 9058.

Here are examples of employees who fall under 9052:

• Bellhops
• Maintenance staff
• Housekeeping
• Front desk
• Concierge

For more detailed information about these classifications, head to our blog on hotel workers' comp class codes.

How much does Workers’ Comp for Hotels cost?

In 2024, the average workers’ comp rate for hotel employees is $1.65 per $100 of payroll, which equals to approximately $69 per employee each month. However, your exact premium depends on factors like payroll size and claims history.

Want to calculate the cost for your hotel? Check out our full guide on Workers’ Comp Rates for Hotels to learn more.

Pay-As-You-Go Workers’ Comp

Hotels, especially those that hire seasonal or project-based workers, may benefit from a pay-as-you-go workers’ comp plan. Unlike a fixed premium plan, pay-as-you-go calculates premiums based on actual payroll each month, providing more financial flexibility. During busy periods with more staff, you’ll pay more; during slower months, you pay less. This can help manage cash flow and reduce financial strain.

Subcontractors and 1099s in Hotels

Hotels often subcontract maintenance or other services. If you hire subcontractors, ensure they have their own workers’ compensation insurance. Without it, you may be liable for any injuries they sustain while working on your property. 

Always collect their Certificates of Insurance (COIs) to protect your business from these risks.

For uninsured subcontractors, you’ll need to cover them under your policy, which could result in higher premiums. Be proactive by verifying insurance coverage upfront.

Acceptable Workers’ Comp Limits for Hotels

Hotels fall into a mid-tier risk category—not as high-risk as construction but more exposed to risks than typical office settings like accounting. For that reason, a standard liability limit of $500,000 is recommended across the board. If you’re part of a franchise, ensure your workers' comp limits align with corporate guidelines, which may require higher limits.

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How can I save money on Workers’ Comp for Hotels?

Every business owner knows how important it is to save money and you can reduce the costs of your workers’ comp coverage without sacrificing protection. In addition to ensuring accurate job class codes, you can also implement a return-to-work program, create a drug-free workplace, require safety training, and create a safety team. 

Let’s look more closely at each of these.

Safety Training – Every business needs a safety program that’s designed to give employees important information. This should include things like lifting heavy loads properly, using safety glasses, and other best practices. It should also be tied directly to OSHA’s safety requirements.

Drug-Free Workplace – Alcohol and drug use is one of the leading causes of workplace accidents. According to the US Bureau of Labor Statistics, they contribute to 65% of on-the-job accidents every year. Creating a drug-and-alcohol-free workplace can dramatically increase your employees’ safety and the costs of workers’ comp for hotels. This should involve education, outreach, and testing.

Return-to-Work Programs – Often, employees injured on the job can return to lighter duties long before they’re ready to resume their previous roles. Creating a return-to-work program encourages employees to return when they’re ready at a lighter level to begin earning an income once more. Studies also show that employees who return to work with lighter duties recover more quickly.

Building a Safety Team – Many of the hazards your employees face are normal parts of their everyday environment. A safety team can identify hazards (worn carpeting, ice-prone walkways, etc.) that pose risks to employees and guests and then instigate efforts to repair, replace, or redesign the space to remove those threats. They can also monitor employee behavior, provide safety-related guidance, and more.

What types of injuries fall under Hotel Workers’ Compensation?

It’s impossible to list the types of accidents and injuries that fall under workers’ compensation, but they all share a few things in common. To be considered “compensable” and eligible under workers’ comp for hotels, an injury must have happened to one of your employees (not a vendor, guest, or contractor), be the result of a workplace injury or illness while the person was an employee (not a preexisting condition from a previous job), and cause impairment and/or lost wages.

How do I get Workers’ Comp for Hotels?

You could buy workers’ comp insurance through your general liability insurance carrier in a perfect world. However, this isn’t a perfect world; not all insurers offer workers’ compensation insurance. Compounding that is the fact that underwriting guidelines may make your business less attractive to those that do. It’s all about their risk tolerance.

If you’re having a hard time finding workers’ compensation coverage for your hotel or other hospitality industry business, Kickstand Insurance is happy to help. We’ve worked with other just like you to find affordable coverage that offers protection for your employees and peace of mind for you. 

It takes about five minutes to complete our brief form and provide us with the information we need to start your quote. Then one of our experienced representatives will contact you with the quote and discuss how to customize your policy while ensuring accuracy and finding ways to reduce your costs.

Ready to get the protection you need? Get in touch today.