Iranian Hotels Lacking All-Inclusive Insurance

While highly diverse insurance services have been designed for hotel businesses worldwide, Iranian hoteliers have to make do with the most limited coverage, which is one of the reasons for the losses they often incur.

This is both due to the limited number of plans lined up by insurance companies and the hoteliers' lack of knowledge about the rewarding options.

Even when briefed about the available plans, many hoteliers are disinclined to pay hefty premiums for specialized insurance coverage, as they deem unforeseen incidents to be highly improbable, Risknews.ir reported.

 The most common insurance policies bought by Iranian hotels include fire and explosion, worker's compensation and accident coverage for guests and staff.  

However, a few other schemes are also available that hoteliers seldom pick. These include all-risk property insurance that covers loss arising from any fortuitous cause except those that are specifically excluded, business interruption insurance (also known as business income insurance) that covers the loss of income that a business suffers after a disaster, and insurance for electronic devices.

Guests' property is only insured under the fire scheme and there is no compensation for the hotel in case of theft. One company has introduced a new scheme that insures guests' camera, mobile phone, laptop and tablet for up to 5 million rials ($120) but only in 4- and 5-star hotels.    

Health insurance for guests is offered by the Social Security Organization and is not mandatory.

This is while over 30 insurance policies have been devised globally to reimburse losses that hotels might suffer.

Schemes cover losses caused by employees' errors, events that tarnish the hotel's reputation, damage to parts of a heritage building, business interruption for unwanted reasons, personnel's involvement in criminal activity, interruption of power or water supply, legal complaint against the hotel, theft, spoilt food, contamination and cyberattack.

Health, unemployment, disability, liability and accident are among the most widely used schemes in the world insurance industry.

A variety of plans are targeted at the guests of international hotels. Their properties and personal information such as credit card info are insured against damage or theft.

Certain hotels also insure their luxury cars against any possible damage.

These programs are offered by many insurance companies overseas, but very large enterprises might also devise specific policies to address the needs of hotels.

In Iran, the low level of insurance shows hotel management banking on belief in good omen to ward off evil, instead of preparing for all possible contingencies.  

Although it might seem an unnecessary expense, a comprehensive insurance package can add to a hotel's credibility and reduce the risk of huge economic losses or bankruptcy in the event of an unpredictable disaster.

Both insurance companies and hoteliers should seriously consider the issue of people's safety and satisfaction, as well as the prosperity of hotel industry.