By Karim Chandani and Jason Stallard

Imagine your hotel operates a shuttle service to the airport. One cold, snowy night, the shuttle driver collects five people from the airport and heads back to the hotel. She has driven this route four times already today without incident, but this time there are a number of cars approaching a red light at the same time. One car hits a patch of ice and begins to skid. The shuttle driver tries to navigate carefully, but she also hits a patch of ice, and eventually four cars are involved in the collision.

In a case like this, it may take some time to resolve the claim. It may not be clear who was at fault, so the shuttle may not be fixed quickly. The hotel may not have another shuttle to operate the service, and it may be footing the bill for a taxi instead. Meanwhile, the driver may or may not need to be paid. And what happens to the injured people, who may have medical bills piling up?

It’s a lot to think about when shuttling guests. Shuttle service insurance should include:

Passenger hazard liability and property insurance. When a hotel shuttle takes on passengers – and their luggage – the hotel has the legal liability for any bodily injuries or property damage.

Third party liability coverage. When a hotel shuttle gets into a car accident, the hotel has the legal liability for bodily injury or property damage to others.

It’s worth noting that the minimums do vary from province to province, but the minimum is not likely to be enough to cover you properly. In the example above, for example, a standard $5 million liability policy probably isn’t enough. You may need an extra layer covering up to $10 or $15 million.

And while seems like every hotel offers shuttle service, making it tempting to jump in and offer the service, do your homework and planning ahead to create the right shuttle program for your operations. Think about the following:

  • Consider other options. Offering a shuttle service is an expensive proposition for a small or mid-sized hotel. It may make more sense to offer taxi service on a reimbursement basis rather than operating a full shuttle service. Another option is to partner with a group of local hotels to share costs.
  • Make sure you have the right liability and limits. You probably want to cover yourself for $10 million, and add an extra layer. Make sure the coverage allows for a variety of drivers in order to allow enough flexibility in hiring and scheduling.
  • Be careful about hiring drivers. You’ll need to request the candidate’s driver’s abstract to ensure he or she has a clean record. Experienced drivers (at least three years) are preferred and less expensive to cover.

Offering a shuttle service may be right for your hotel business, but it is no simple matter. Make sure you have the right coverage and do your research before opening the service in order to turn your shuttle service into an asset rather than a loss.

Contact a HUB hospitality specialist to ensure your shuttle service has the right kind of coverage against risk.