Innfo: Operating A Successful B&B
A Guide For The Serious B&B Innkeeper
Business Insurance
for the Bed and Breakfast Innkeeper
January 15, 2006
by Kit Cassingham
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There are lots of insurance options to consider when you own a bed and breakfast. Some of the most
important ones to consider are business insurance, auto insurance, health (or medical) insurance,
and life insurance. You can shop for term- and whole-life insurance policies, long-term care and
disability insurance, whole life and universal life insurance, individual- or group- or self-
employed-health insurance, and of course cheap or affordable insurance policies too. Don't forget to
consider renter's insurance and flood insurance, depending on your situation.
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One of the most common questions I get from clients is whether
their homeowner's insurance will suffice for their bed and breakfast. The short answer is "no". The longer
answer is "no way". It's important to think about insurance for the business -- building, liability, and
contents -- just as it's important to think about auto insurance, health insurance, life insurance (be it
term life, whole life, or universal whole life), long term care insurance, and disability insurance.
You want to have business insurance that covers the replacement
value of your building(s), the inn's contents (furniture, fixtures, and equipment -- FF&E), and liability
insurance in the event a guest or employee gets hurt. If you live in a flood zone, don't forget to buy
flood insurance. Some innkeepers lease buildings adjacent to the inn as a way of expanding their business.
Don't forget to insure those buildings and contents too -- be it with renters insurance or a separate
business insurance policy.
Property insurance will generally cover your losses from:
fire
windstorm and hail damage
lightning strikes
vandalism
You want to ask about coverage for:
your computer and its periferals
intangible property (goodwill and trademark being example
inventory and supplies, leased equipment
money you may keep on the premises
your signage
the fence and any other property attached to the building(s)
Be sure this is insurance that covers a small business, specifically your bed and breakfast business.
Auto insurance is an important policy to have if your car gets
used for any aspect of your B&B business. Obviously your car is covered. What about employees who are
driving it? Uninsured motorists? Guests? Ask your agent how far you need to go in your protection. Cheap
car insurance may not be the way to go because you do want to be sure to be covered when you have a claim.
You can't afford to not have health insurance. And for that
matter, you are well advised to get long term care insurance and disability insurance too. You have too
much at stake in your bed and breakfast to leave it up to luck of good health and no accidents. Of course
you should seek affordable health insurance, whether you find individual health insurance or group. There
are low cost health insurance policies available, though there probably aren't any cheap health insurance
coverages to be found, and using an insurance agent is a great way to go to find the policy that will work
for you and to manage your account. Even if all you get is major medical insurance, get something.
Life insurance is another valuable insurance to buy. Your options
include:
term life insurance
whole life insurance
universal life insurance
Whatever you do, be sure to have life insurance policies for all of the innkeepers in the business.
Consider cheap life insurance or cheap term life insurance to give your survivors extra financial
protection.
Insurance is an often overlooked business necessity in the bed
and breakfast industry. I know too many innkeepers who have had to give up their dream because they didn't
plan for illness or accidents by buying proper insurance. I know a very few innkeepers who planned ahead,
and when faced with problems their various insurance policies kicked in, saving their business and
financial assets.
While you are making plans to be successful with your bed and
breakfast, include insurance policies in your plans.
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