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Article
15 May 2020

What about insurance, cancellations and directors’ liability?

Have you thought about whether you are still complying with the terms of your insurance policy?

  • For example, your insurance policy may require that the hotel is not empty for more than a specified number of days. We suggest you review your insurance policy and if you are not complying with it, approach your insurance broker to ask if they can secure a temporary exemption from the relevant requirement.
  • Have you cancelled all reservations / bookings for the period of force closure? Have you refunded your guests? Whether you are required to offer a refund does depend on your terms and conditions and so it is worth reviewing these. Although, it is appreciated that you may prefer to refund guests in full in order to preserve good-will.
  • Do the hotel’s company directors fear personal liability if they continue to pay rent / wages despite concerns that the company may become insolvent? With effect from 20 March, the law has changed to enable the directors to continue to make these payments without risk of personal liability. Please see here for further details.

To read more tips for hotel owners and managers click here.