Insurance Curator Last updated: February 2026 — Focus market: United States
Table of Contents
- Why Cybersecurity Insurance Is Now Non-Negotiable for U.S. Hotels
- Unique Cyber Risks Facing the Hospitality Sector
- Key Cyber Insurance Coverages Hotels Must Demand
- How Much Does Hospitality Cyber Insurance Cost in the USA?
- Top Carriers & Policy Options Compared
- Underwriting Red Flags: What Insurers Look For
- Claims Scenarios & Payout Examples
- Best Practices to Lower Premiums & Boost Insurability
- State-Specific Regulations Hoteliers Cannot Ignore
- How to Build a Cyber-Resilient Hospitality Tech Stack
- Frequently Asked Questions
Why Cybersecurity Insurance Is Now Non-Negotiable for U.S. Hotels
The U.S. hospitality industry processes and stores some of the richest data sets on the planet: passports, credit-card numbers, loyalty points, and high-net-worth guest preferences. According to IBM’s Cost of a Data Breach 2023 Report, the average breach in hospitality cost U.S. brands $3.6 million—a 12% jump year-over-year. (Source).
Meanwhile, payment card skimming campaigns like FIN7 and ransomware gangs such as LockBit have pivoted toward hotel chains because legacy Property Management Systems (PMS) are often unpatched. Insurance carriers have responded by tightening underwriting requirements and hiking premiums an average of 28% in 2024 for the lodging sector. (Source: Marsh Cyber Market Report 2024).
Bottom line: If your hotel in New York City, Orlando, or Las Vegas processes reservations online, you need a specialized cyber liability policy yesterday.
Unique Cyber Risks Facing the Hospitality Sector
1. High-Volume Payment Card Transactions
Hotels swipe cards multiple times per stay—at booking, check-in, on-property restaurants, spas, and check-out—multiplying PCI-DSS exposure.
2. Distributed Franchises & Management Companies
Franchisors often lack visibility into the network security posture of each managed property, creating large attack surfaces.
3. Seasonal Staffing & Turnover
Temporary staff in peak seasons increase social-engineering and credential theft risks because training is inconsistent.
4. IoT & Smart-Room Devices
Keyless locks, smart thermostats, and voice assistants widen the threat landscape; a 2023 University of Nevada study found 41% of hotel IoT devices still run default passwords.
5. Third-Party Booking Engines
Integration with OTAs, GDSs, and channel managers introduces supply-chain vulnerabilities similar to what we discuss in Manufacturing Sector Cybersecurity Insurance: Protecting OT and Supply Chains.
Key Cyber Insurance Coverages Hotels Must Demand
| Coverage Component | Why It Matters for Hotels | Minimum Recommended Limit |
|---|---|---|
| Data Breach & Privacy Liability | Covers costs if guest PII/PCI data is exposed. | $1M–$5M per 100 rooms |
| PCI-DSS Assessments & Fines | Card networks levy fines up to $500k per incident. | $500k sub-limit |
| Reservation System Interruption | Lost revenue when PMS or booking engine is down. | Dependent on RevPAR; aim for 10 days of gross room revenue |
| Social Engineering (Funds Transfer Fraud) | Front-desk email spoofing leading to wire fraud. | $250k min. |
| Ransomware & Extortion | Covers ransom payments, negotiation, and restoration. | $1M+ |
| Incident Response Costs | Forensics, PR, legal, call center. | No separate sub-limit |
| Regulatory Defense | CCPA, NY Shield Act, FTC investigations. | $1M |
Pro tip: Make sure “system downtime” extends beyond your own network to include dependent business interruption—outages at cloud PMS vendors like Oracle Opera or Clock PMS+.
How Much Does Hospitality Cyber Insurance Cost in the USA?
Premiums vary widely based on property size, prior losses, and security posture. Below is a snapshot of 2024 quotes our brokerage placed for hotel clients in Florida, Nevada, and New York:
| Hotel Profile | Annual Revenue | Record Count | Carrier | Retention (Deductible) | Annual Premium |
|---|---|---|---|---|---|
| 200-Room Boutique – Miami, FL | $18 M | 350k guest records | Beazley Breach Response | $25k | $42,500 |
| 800-Room Strip Resort – Las Vegas, NV | $160 M | 1.9 M guest records | AIG CyberEdge | $100k | $225,000 |
| 120-Room Upscale – Saratoga, NY | $9 M | 140k guest records | Travelers CyberRisk | $15k | $17,800 |
Figures are real quotes anonymized for confidentiality; data on file at Insurance Curator Brokerage, January 2024.
Top Carriers & Policy Options Compared
| Carrier | Notable Hospitality Features | Typical Price Range per $1M Limit | Incident Hotline |
|---|---|---|---|
| Beazley | Embedded breach response team; complimentary 5,000 guest notifications | $12k–$25k | 24/7 |
| AIG CyberEdge | Hotel-specific business interruption calculator; covers keycard system failures | $18k–$30k | 24/7 |
| Chubb Cyber ERM | Includes contingent BI for OTA outages | $15k–$28k | 24/7 |
| Hiscox eRisk | Lower premiums for properties under 150 rooms | $10k–$18k | 24/7 |
| Travelers | Integrates PCI and cyber into a single endorsement | $9k–$20k | 24/7 |
For chains with more than 50 U.S. properties, consider layered towers—e.g., $10M primary with Chubb + $15M excess with Lloyd’s syndicate—to meet lender and franchise brand requirements.
Underwriting Red Flags: What Insurers Look For
- Unsupported Windows POS terminals (e.g., Windows 7).
- Lack of Multi-Factor Authentication for remote PMS and VPN.
- No documented patch-management cadence—particularly for Oracle Micros POS.
- RDP open to the internet (a deal-breaker for most underwriters).
- No tabletop incident-response drills in the past 12 months.
- Absence of PCI-DSS SAQ documentation.
Address these before marketing your submission to avoid automatic declinations or 30%+ surcharge.
Claims Scenarios & Payout Examples
Case Study 1 – Ransomware at a Chicago Luxury Hotel
• Threat actor encrypted on-premises PMS and demanded $550,000 in Bitcoin.
• Hotel suffered 3-day outage, losing $1.2 M in bookings.
• Insurer (Chubb) paid ransom, forensics, and $975k business interruption after 12-hour waiting period.
• Total claim: $1.76 M; deductible: $100k.
Case Study 2 – POS Malware in a San Diego Beach Resort
• Skimmer captured 180,000 card numbers.
• Visa levied $250,000 in PCI fines; MasterCard $90,000.
• Notification & credit-monitoring for guests cost $430,000.
• Beazley policy capped PCI at $500k; hotel paid $−0- out-of-pocket after $25k retention.
Case Study 3 – Social Engineering Wire Fraud in Austin, TX
• AP clerk received spoofed email “from GM” instructing $150k wire to new food supplier.
• Travelers reimbursed $135,000 after sub-limit, plus legal recovery efforts.
Best Practices to Lower Premiums & Boost Insurability
- Deploy MFA on all remote logins and privileged accounts.
- Segment guest Wi-Fi from corporate network; use VLAN tagging.
- Implement Endpoint Detection & Response (EDR)—solutions like CrowdStrike have shown 28% premium credits with certain carriers.
- Annual PCI-DSS Level 2 audit, even if not required, demonstrates proactive stance.
- 24/7 SOC monitoring; hotels outsourcing to MSSPs (e.g., Arctic Wolf) saw up to 20% savings.
- Incident-response retainer (CrowdStrike, Mandiant) is now required by AIG and Beazley for limits over $5 M.
- Phishing simulations for seasonal staff every 90 days.
Tip: Cross-industry insights, such as those used by Retail & eCommerce Cybersecurity Insurance: Safeguarding POS Systems and PCI Data, can help hotels adopt robust POS security standards.
State-Specific Regulations Hoteliers Cannot Ignore
| State | Key Law | Implication for Hotels |
|---|---|---|
| California | CCPA / CPRA | Mandatory breach notification within 72 hrs; statutory damages $100–$750 per guest record. |
| New York | NY Shield Act + NYC SSA 10-503 | Requires “reasonable safeguards,” including risk assessment and employee training. |
| Nevada | SB 538 | Mirrors CCPA for data brokers; affects Las Vegas resorts sharing guest data with partners. |
| Massachusetts | 201 CMR 17.00 | Encryption at rest & in transit is mandatory for PII. |
Non-compliance can void cyber policies’ regulatory defense coverage, so coordinate with legal counsel.
How to Build a Cyber-Resilient Hospitality Tech Stack
- Cloud-Native PMS (e.g., Mews, Cloudbeds) with SOC-2 certification.
- Tokenized Payment Gateways like Shift4 or Adyen Hospitality.
- Next-Gen Firewalls geo-fenced for typical guest origins.
- Zero-Trust Network Access (ZTNA) for remote employees.
- Immutable Backups stored off-site (WORM).
Integrating these tools not only reduces breach likelihood but can unlock premium discounts of 10%-25% depending on carrier.
Related Reading for Industry Peers
• Cybersecurity Insurance for Healthcare: Meeting HIPAA and Ransomware Risks
• Financial Services Cybersecurity Insurance: Managing Wire Fraud & Regulatory Exposure
• Legal Firms and Cybersecurity Insurance: Client Confidentiality and Data Breach Coverage
Frequently Asked Questions
Q1. Is cyber coverage included in my general liability or property policy?
A: Rarely. Most GL policies carry an absolute cyber exclusion post-2014. You need a standalone cyber or a robust endorsement.
Q2. What limit should an independent 150-room hotel carry?
A: Start at $2 M. If you process over 250k card transactions annually or host high-profile events, consider a $5 M tower.
Q3. How long does the underwriting process take?
A: With a complete cyber application and loss-control questionnaire, expect 7–14 days for quotes; longer if you lack MFA or EDR.
Q4. Can I negotiate retentions?
A: Yes. Increasing the deductible from $25k to $50k often yields 8%-12% premium savings—evaluate cash-flow tolerance.
Q5. Will claims affect franchise agreements?
A: Major brands (Marriott, Hilton) require immediate notice of breaches. Failure can lead to penalties or termination.
Final Takeaway
Cyber threats to U.S. hotels are escalating in cost, frequency, and complexity. A tailored cybersecurity insurance policy—paired with strong controls—provides the financial firewall your property needs to protect guest trust and RevPAR. Engage a broker who understands the nuances of hospitality IT and can negotiate terms beyond boilerplate coverage.
Secure your reservation systems today—before attackers make one for you.