As the year draws to a close, the hospitality industry, including hotels, restaurants, resorts, and cafes, enters its busiest period on the business calendar. Occupancy rates rise sharply, reservations fill up months in advance, and operating hours lengthen. However, behind this encouraging economic upturn, lurk serious risks that could threaten business continuity.
Kitchen fires caused by overuse of equipment, electrical short circuits caused by additional decorations, and even guest slipping in public areas—all of these can happen at any time. Even a small incident can escalate into significant financial losses and damage a business’s reputation. Increased hospitality risks during peak season require protection beyond standard insurance.
This is why comprehensive protection such as PAR (Property All Risks) insurance, public liability insurance, and parking liability insurance are essential, not optional. This protection will maintain the stability of your business, even when risks arise suddenly. As the 2026 New Year holidays approach, the hospitality industry faces a significant increase in risk. Don’t let a single incident harm your valuable assets. It’s time to protect your business with PAR insurance that includes FLEXAS, public liability insurance for third-party claims, and parking insurance.liability for guest safety. ContactL&G Insurance Broker now in08118507773 for a free consultation before the risk occurs.
Factors that Increase the Risks of Hotel and Restaurant Businesses
The long end-of-year holiday season is a time of significant activity in hotels and restaurants. However, this surge also means increased hospitality risks. Continuously running kitchens, enhanced decorations (often with non-standard electrical installations), overloaded electrical equipment, and high visitor numbers can all trigger unexpected incidents.
According to data from the National Disaster Management Agency (BNPB), approximately 70% of business fires are caused by electrical short circuits and human error. In the hospitality sector, this is especially vulnerable due to the combination of high-volume activities and intensive equipment (such as boilers, laundry machines, and cooling systems).
As a hospitality business owner or manager, it’s important to understand that fire and property insurance alone aren’t enough. Risks in this sector are more complex, encompassing legal liability and business interruption, requiring comprehensive and integrated coverage.
Before risk destroys your assets, contact L&G Insurance Broker now at 08118507773 for a free consultation. Our professional team is ready to help assess risks and develop comprehensive protection solutions for your business.
Understanding PAR Insurance and Its Benefits for Hotels & Restaurants
PAR (Property All Risks) insurance is a much broader form of protection than regular fire insurance. This policy covers almost all types of physical damage to property, including risks not explicitly mentioned, as long as they are not excluded in the policy.
For hotel and restaurant businesses, PAR insurance coverage is particularly relevant as it protects:
- Hotel or restaurant buildings, including interiors, physical structures, and permanent installations.
- High-value kitchen appliances, electronics, laundry machines, and central air conditioning systems.
- c. Stock of goods such as food, drinks, linen, and guest supplies.
- d. Repair and replacement of assets due to insured risks.
Additionally, PAR insurance covers FLEXAS (Fire, Lightning, Explosion, Aircraft Impact, Smoke), the five main risks that most often cause significant losses in the hospitality sector. For example, a restaurant can suffer billions of rupiah in losses due to a kitchen fire caused by a leaking gas cylinder.
With PAR insurance that includes FLEXAS, such losses can be minimized or reimbursed by the insurance company. However, selecting the right policy requires in-depth analysis of underinsurance and wording. This is where an experienced insurance broker like L&G Insurance Broker plays a crucial role in ensuring coverage aligns with your business’s risk profile.
Preventing Major Losses in the Hospitality Sector
FLEXAS is an acronym that summarizes the basics of property insurance coverage for the five most common and destructive risks. Understanding the components of FLEXAS is crucial for hotel and restaurant fire risk management. Here’s an explanation:
- Fire: The main risk in restaurants and hotels, especially from the kitchen (hot oil, dirty hoods) and overloaded electrical installations.
- Lightning: Can damage complex hotel electrical systems (electrical panels, IT systems) or cause secondary fires due to power surges.
- Explosion: Often caused by LPG gas leaks in restaurant kitchens or a faulty cooling system (AC).
- Aircraft Impact: Protects against damage caused by falling debris or impacts from aircraft on the property area.
- Smoke: Damage from smoke and fire extinguisher residue can also be significant, especially in hotel public areas (carpets, walls, wallpaper) which can be expensive to clean.
PAR insurance policywithFLEXAS is crucial because many incidents not only destroy buildings but also halt operations for weeks. Through L&G Insurance Broker, you can ensure all FLEXAS elements are fully covered with competitive premiums and a fast claims process.
Securing Your Business from Third Party Claims
Hotels and restaurants are public spaces that welcome hundreds to thousands of people daily. When incidents occur, such as a guest slipping in a wet lobby or a restaurant patron being injured by broken glass, the business owner can be held legally liable and face lawsuits.
This is the function of public liability insurance. This policy protects your business from third-party claims resulting from injuries, property damage, or death occurring on your premises.
For example, a hotel in Jakarta once had to pay hundreds of millions of rupiah after a guest slipped in the pool area and broke a bone. Without public liability, all medical and compensation costs would have to be covered out-of-pocket, threatening the hospitality business’s cash flow.
Public liability insurance not only protects your finances but also safeguards your business’s reputation in the public eye. As a hospitality business owner, you can’t afford to delay having one.this protection. Therefore, contactL&G Insurance Broker now in08118507773 for a free consultation before the risk occurs.
Often Overlooked Risks
Responsibility for Guest Vehicles
Many hotels and restaurants offer valet parking or large parking areas, but they often fail to realize that these areas pose significant risks. Guests’ vehicles can be damaged or even lost while parked in the parking area. In these cases, the management can be held liable, especially if the vehicle is under the care, custody, or control of the valet staff.
Parking liability insurance protects your business from lawsuits or claims for damages resulting from loss or damage to guest vehicles in the parking area.
For example, a hotel in Surabaya lost a guest’s vehicle due to a valet ticketing system error. The compensation amounted to hundreds of millions of rupiah. Fortunately, the hotel had an active parking liability policy, so the loss was fully covered by insurance.
Through a trusted insurance broker like L&G Insurance Broker, you can obtain a comprehensive protection package that includes parking liability with efficient premiums, adjusted to the daily parking traffic volume of your hotel or restaurant.
Integrated Insurance Solutions for Hospitality
A single type of insurance coverage isn’t sufficient for a hospitality business. A recommended combination of coverages to navigate the busy holiday season includes:
- PAR (Property All Risks) Insurance: Protects physical assets (buildings, interiors, machinery) and stock from FLEXAS risks and other damage.
- Business Interruption Insurance: Covers loss of income and operating costs while the hotel or restaurant is closed due to fire or damage covered by the PAR policy.
- Public Liability Insurance: Protects businesses from third-party (guest) claims resulting from injury or damage to the property.
- Parking Liability Insurance: Protects legal liability for guest vehicles damaged or lost in the parking area or valet service.
With this combination, your hotel and restaurant have comprehensive protection against almost all the major risks that can arise during the holiday season.
The Vital Role of Insurance Brokers in Managing Hospitality Risks
Many business owners assume that purchasing a policy directly from an insurance company is sufficient. However, without in-depth analysis from a professional insurance broker, you could be over-insured (paying high premiums for no benefits) or under-insured (not fully protected in the event of a major loss).
L&G Insurance Broker is a professional partner who understands the intricacies of risk in the hospitality industry. Our roles include:
- Specific Risk Analysis: We identify risks from kitchen design (fire hazard), electrical capacity (short circuit), to valet procedures (parking liability).
- Best Policy Selection: We compare and negotiate PAR, public liability, and parking liability insurance policies from leading insurance companies.
- Competitive Premium Negotiation: We ensure your business gets maximum protection at an efficient cost.
- Full Claims Assistance: We act as your advocate throughout the claims process, ensuring prompt and fair payment when disaster strikes.
With a solutions-based approach, we ensure your business receives maximum protection tailored to hospitality risks in South Tangerang and throughout Indonesia.
Risk Management Recommendations for Hotels & Restaurants
In addition to having insurance, mitigation steps must also be taken to reduce the frequency of hospitality risks:
- Routine Electrical Audit: Routinely inspect electrical installations and gas systems at least twice a year.
- Emergency Training: Train staff in emergency evacuation procedures and use of fire extinguishers.
- Parking Security System: Ensure parking areas have adequate security systems and strict valet procedures.
- Fire Protection System Testing: Routine maintenance of hydrant, sprinkler, and fire alarm systems to ensure FLEXAS protection is working.
These simple steps will reduce your risk and strengthen your position when filing an insurance claim.
Conclusion
The end-of-year holidays are a golden opportunity, but also a significant risk for the hotel and restaurant business. Hospitality risks increase exponentially, from potential kitchen fires to lawsuits stemming from unexpected guest incidents. The financial losses from a single major incident can reach billions of rupiah, destroying cash flow and damaging hard-earned reputations. Incidents like guest slips or property damage due to short circuits are real threats that require more than just standard operating procedures (SOPs)—they require robust financial protection that’s ready to pay.
Adequate protection for a hospitality business isn’t just about fire insurance. An integrated package is needed, including PAR (Property All Risks) insurance with FLEXAS coverage for physical assets, Business Interruption coverage for loss of income, Public Liability coverage for legal liability to guests, and Parking Liability coverage for guest vehicles. Failure to have any of these policies can create a potentially fatal risk gap. L&G Insurance Brokers are experts ready to ensure your policy is comprehensive, risk-appropriate, and cost-effective.
Don’t let your peak business moments become your worst moments due to an unexpected disaster. L&G Insurance Broker is ready to be your strategic partner in hospitality risk management. Take proactive action now, before the fire tests your preparedness.
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DON’T WASTE YOUR TIME AND SECURE YOUR FINANCIAL AND BUSINESS WITH THE RIGHT INSURANCE.
HOTLINE L&G 24 JAM: 0811-8507-773(CALL – WHATSAPP – SMS)
Website: lngrisk.co.id
Email: halo@lngrisk.co.id
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