Bed And Breakfast Insurance Policy Information
Bed And Breakfast Insurance. Many people, whether they are traveling for business or enjoying a vacation, much prefer the cozy and more personal atmosphere a bed and breakfast can offer to the thought of staying in a hotel. These small establishments provide not only rooms but also, as the name suggests, breakfast.
Bed and breakfast inns provide short-term lodging with a limited number of rooms. There may be common areas for guests to congregate, such as a living room, backyard, or porch. Often, the inns are converted dwellings or historical facilities that offer a romantic or rustic atmosphere.
Some are located in boats or lighthouses. Breakfast is included in the lodging charge, and other meals may or may not be offered. Some will have a full restaurant operation available to the general public, while others will serve only guests.
The inn can be an extension of a private dwelling with a room or rooms available, while others are full-time operations.
Limited recreational facilities may be available. If the inn offers rooms through both in-house and third-party websites, all room charges, including mandatory gratuity charges or "resort fees," must be disclosed to prevent allegations of deceptive advertising practices.
Websites should clearly state whether the facility and its guest rooms can accommodate those with disabilities.
Whether you are considering opening a B&B - and have perhaps already found the perfect property - or you already own and operate a bed and breakfast, you will already know that these establishments can easily grow to be successful small businesses to which guests return time and time again.
B&B owners also, on the other hand, face numerous risks. A multitude of unforeseen circumstances can put your business in jeopardy unless your B&B is armed with a comprehensive insurance program. What types of bed and breakfast insurance should be put in place, and why?
Bed and breakfast insurance protects your inn from lawsuits with rates as low as $47/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked bed and breakfast inn insurance questions:
- What Is Bed And Breakfast Insurance?
- How Much Does Bed And Breakfast Insurance Cost?
- Why Do Bed And Breakfasts Need Insurance?
- What Type Of Insurance Do Bed And Breakfasts Need?
- What Does Bed And Breakfast Insurance Cover & Pay For?
What Is Bed And Breakfast Insurance?
Bed and Breakfast (B&B) insurance is a specialized insurance policy that provides protection for owners of B&Bs against financial losses and other liabilities. This insurance covers risks associated with operating a B&B, such as property damage, theft, fire, and liability claims from guests. It may also provide coverage for personal injury, lost income due to business interruption, and legal expenses.
B&B insurance is designed to meet the specific needs of B&B owners and offers coverage options that are not included in standard homeowner's insurance policies.
How Much Does Bed And Breakfast Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small bed and breakfasts ranges from $47 to $79 per month based on location, size, revenue, claims history and more.
Why Do Bed And Breakfasts Need Insurance?
While you will do everything in your power to build a customer-oriented business and run a smooth operation, bed and breakfast owners should never overlook the fact that many things can go wrong. The fact that most B&B owners live within the property themselves only adds an extra dimension to the risks they face.
Like any other business, a bed and breakfast could, for instance, be affected by an act of nature, such as a hurricane, earthquake, or wildfire. Theft, vandalism, and accidents that cause fires or serious plumbing disasters are further examples of the types of perils that may impact a B&B. All these perils have the potential to severely damage your property and force you to temporarily close your establishment.
B&B owners also have to consider the possibility that someone could file a lawsuit against them. Situations that range from employees being injured on the job to unsatisfied customers and accidents in which you inadvertently damage another person's property could lead to costly and time-consuming litigation.
The list of threats your business faces is almost endless, but the one characteristic all perils share is that they saddle you with massive and unplanned costs. When you invest in the right insurance policies, however, you will not have to cover all these expenses on your own.
Besides the fact that some types of insurance are legally mandated, protecting your financial future is the most important reason to purchase the best bed and breakfast insurance you can.
What Type Of Insurance Do Bed And Breakfasts Need?
If you are finding it hard to determine what types of insurance you should carry, that is no surprise - each bed and breakfast has unique insurance needs influenced by factors like the location of your B&B, your number of employees, the size of your business, and the number of guests you receive.
Because of this, it is crucial to consult a commercial insurance broker who specializes in small businesses and who can help you craft the insurance plan that will best protect your bed and breakfast. With that in mind, the following types of bed and breakfast insurance are vital for B&B establishments:
- Commercial Property: This type of coverage protects you from ruinous financial losses in the event that your bed and breakfast - and its contents - is damaged due to an act of nature, theft, or act of vandalism. With additional business interruption insurance, your business additionally recovers some of the revenue lost due to temporarily closure following a major peril.
- Commercial General Liability: Should your B&B face third party bodily injury or property damage claims, such as if a guest were to fall down slippery stairs, this form of bed and breakfast insurance helps cover the legal costs, such as attorney fees and settlement expenses, that you may incur in the process. All businesses should carry general liability insurance.
- Innkeepers' Liability: B&B establishments are legally obliged to take reasonable care of their guests' belongings. In the event that items are stolen or damaged while in your care, these policies cover the costs.
- Workers Compensation: Even if you make health and safety a top priority, an employee may always get injured in the workplace. In such cases, workers' comp covers their medical bills and any lost income.
These important types of insurance form the core of your needs as a bed and breakfast owner. However, you may also need additional forms of bed and breakfast insurance coverage, such as commercial auto insurance. To find out more, talk to a commercial insurance broker.
Bed And Breakfast's Risks & Exposures
Premises liability exposure is high due to public access to the facility. The operation should meet all life safety codes to assure guest safety. To prevent trips, slips, and falls, the inn must be well maintained, with floor covering in good condition. The number of exits must be sufficient and well marked, with backup lighting in case of power failure.
Steps should have handrails, be well lighted, marked, and in good repair. Balconies should be regularly inspected and maintained. Rooms should be treated to prevent pest infestations such as bedbugs. Sidewalks and driveways should be free from defects and cleared of ice and snow in inclement weather. Locks should be changed frequently to prevent unauthorized access.
Lead paint should be contained. Personal injury exposures include allegations of assault, discrimination, false arrest, invasion of privacy, wrongful detention, and wrongful eviction.
Workers compensation exposure is moderate. Cleaning and maintenance operations can result in lung, eye, or skin irritations and reactions. Slip and falls, back injury, hernias, sprains and strains from lifting and working at awkward positions are common.
Food preparation operations can result in cuts, scrapes, and burns. Interaction with guests may involve situations that could produce injuries, such as assault. Employees should be trained in dealing with rowdy guests. Animals owned by guests can bite, scratch, or kick workers.
Property exposures can be high as most bed and breakfast facilities have been converted from older structures to their current occupancy. Conversions should be handled by professionals with appropriate permits and licenses obtained.
Electrical wiring, plumbing, cooling, and heating systems must be updated to current code. If there is commercial cooking, the kitchen should also be upgraded to meet NFPA requirements. Smoking and the use of candles in guests' rooms should be prohibited. Hard-wired smoke detectors should be installed in all guest rooms and common areas.
The age, condition, configuration, size, repair, and roof of the inn affect the potential for loss as damages must be repaired to match the rest of the structure. Business income may be high as there may not be backup facilities available to the owner.
Inland marine exposure is limited to accounts receivable if the inn bills for services, computers, and valuable papers and records for guest and mortgage information. Duplicates of all data should be kept off premises for easy restoration. There may be fine arts for antiques, paintings, or sculptures, or contractors' equipment for maintenance, repairs, and lawn care.
Crime exposure is from employee dishonesty and theft of money and securities. References and background checks should be conducted on all employees. Monetary transactions must be controlled through the use of receipts and regular monitoring.
Guest property coverage provides protection for guests' property from theft by employees, other guests, or trespassers. Access to guest rooms must be limited to those authorized to do so.
Business auto exposure may be limited to hired non-owned liability for employees running errands. If there are owned vehicles, such as those used to service units, any driver should have a valid driver's license and an acceptable MVR. Vehicles must be maintained and records kept in a central location. If guests are transported, the exposure increases.
What Does Bed And Breakfast Insurance Cover & Pay For?
Bed and Breakfasts may face lawsuits for a variety of reasons, such as:
- Guest injury: If a guest is injured while staying at the Bed and Breakfast, the owner may be sued for negligence.
- Property damage: If a guest's property is damaged while staying at the Bed and Breakfast, the owner may be sued for negligence or property damage.
- Food poisoning or illness: If a guest becomes ill after eating food provided by the Bed and Breakfast, the owner may be sued for food poisoning or negligence.
- Discrimination: If a guest feels they were discriminated against while staying at the Bed and Breakfast, the owner may be sued for discrimination.
Insurance can help protect Bed and Breakfast owners in the following ways:
Liability insurance: This type of insurance can help cover legal fees and damages if a guest is injured or their property is damaged while staying at the Bed and Breakfast.
Property insurance: This type of insurance can help cover damages caused by events like fire, theft, or vandalism.
Food contamination insurance: This type of insurance can help cover legal fees and damages related to food poisoning or illness.
Discrimination liability insurance: This type of insurance can help cover legal fees and damages related to discrimination claims.
For example, if a guest slips and falls in the Bed and Breakfast and is injured, liability insurance can help cover legal fees and damages awarded in the lawsuit. If a guest's property is damaged while staying at the Bed and Breakfast, property insurance can help cover the damages.
If a guest becomes ill from eating food provided by the Bed and Breakfast, food contamination insurance can help cover legal fees and damages awarded in the lawsuit.
Finally, if a guest feels they were discriminated against while staying at the Bed and Breakfast, discrimination liability insurance can help cover legal fees and damages awarded in the lawsuit.
Commercial Insurance And Business Industry Classification
- SIC CODE: 7011 Hotels And Motels
- NAICS CODE: 721191 Bed-and-Breakfast Inns
- Suggested Workers Compensation Code(s): 9052 Hotel - All Other Employees & Salespersons, Drivers, 9058 Hotel - Restaurant Employees
Description for 7011: Hotels And Motels
Division I: Services | Major Group 70: Hotels, Rooming Houses, Camps, And Other Lodging Places | Industry Group 701: Hotels And Motels
7011 Hotels And Motels: Commercial establishments, known to the public as hotels, motor hotels, motels, or tourist courts, primarily engaged in providing lodging, or lodging and meals, for the general public. Hotels which are operated by membership organizations and open to the general public are included in this industry. Hotels operated by organizations for their members only are classified in Industry 7041. Apartment hotels are classified in Real Estate, Industry 6513; rooming and boarding houses are classified in Industry 7021; and sporting and recreational camps are classified in Industry 7032.
- Auto courts
- Bed and breakfast inns
- Cabins and cottages
- Casino hotels
- Hotels, except residential
- Inns, furnishing food and lodging
- Recreational hotels
- Resort hotels
- Seasonal hotels
- Ski lodges and resorts
- Tourist cabins
- Tourist courts
Bed And Breakfast Insurance - The Bottom Line
To protect your property, employees and guests, having the right bed and breakfast insurance coverage is important. To see what policies are available to you, how much coverage you should have - and the premiums - speak to a reputable commercial insurance agent.
Additional Resources For Lodging Places Insurance
Find out what types of business insurance that hotels, motels and other lodging places should have to protect their varied operations.
- Bed & Breakfast
- Boarding & Rooming Houses
- Fraternity Houses
- Hotel Motel
- Sorority Houses
- Specialty Hotels And Motels
The hotels, motels, and other lodging places industry is a highly competitive and fast-paced industry, with businesses constantly striving to attract and retain customers. This means that hotels, motels, and other lodging places need to be prepared for any potential risks or challenges that may arise. One way to do this is by obtaining business insurance, which can provide protection against a range of different risks.
One of the main reasons why the hotels, motels, and other lodging places industry needs insurance is to protect against property damage. These businesses rely on their physical assets to generate revenue, so any damage to these assets can have serious financial consequences. Business insurance can provide coverage for damages caused by natural disasters, fires, and other incidents, helping hotels, motels, and other lodging places to repair or replace damaged assets.
Another reason why the hotels, motels, and other lodging places industry needs insurance is to protect against liability claims. These businesses are responsible for the safety and well-being of their guests, so any incidents or accidents that occur on their premises could result in liability claims. Commercial insurance can provide coverage for these types of claims, helping hotels, motels, and other lodging places to cover the costs of legal fees and settlement payments.
Finally, the hotels, motels, and other lodging places industry needs commercial insurance to protect against loss of income. These businesses rely on a steady stream of revenue to stay afloat, and any disruptions to this revenue could have serious financial consequences. Insurance can provide coverage for loss of income caused by unforeseen events, such as natural disasters or pandemics, helping hotels, motels, and other lodging places to stay afloat during difficult times.
Overall, the hotels, motels, and other lodging places industry needs insurance to protect against a range of different risks and challenges. By obtaining the right coverage, these businesses can ensure that they are prepared for any potential setbacks and can continue to thrive in a highly competitive industry.
Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income and Extra Expense, Equipment Breakdown, Accounts Receivable, Computers, Valuable Papers and Records, Employee Dishonesty, Guests Property, Money and Securities, General Liability, Employee Benefits, Liquor Liability, Umbrella, Business Auto Liability and Physical Damage, Hired and Non-Owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Earthquake, Flood, Spoilage, Bailees Customers, Commercial Articles Floater, Contractors Equipment, Fine Arts, Signs, Special Floater, Computer Fraud, Forgery, Cyber Liability, Employment-related Practices, Garagekeepers And Stop Gap Liability.