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Innfo: Operating A Successful B&B
A Guide For The Serious B&B Innkeeper

B&B Business Insurance

September 25, 2006
by Kit Cassingham

The B&B business has insurance needs similar to home insurance, and to other types of businesses. But those similarities aren't enough to make just any insurance work sufficiently well for the B&B. Bed and breakfast business insurance is a must for the B&B innkeeper.

There are some obvious business insurance coverages that you should buy to cover your bed and breakfast, but there several points that get missed and shouldn't. Your small business insurance policy should include:

property insurance, for both the real estate and the contents owned by the B&B

business liability insurance for the B&B and automobiles

theft insurance

property damage insurance

fire protection insurance

And don't forget to also get loss of income, or business interruption, insurance, one item that's overlooked too often.

Policies you might consider, depending on your location:

key man insurance

computer insurance, to cover your computer and its data

workers compensation

Additional coverages that you should at least consider include:

key man insurance

computer insurance, to cover your computer and its data

workers compensation

I recently stayed at a Florida bed and breakfast that had suffered damage in the 2005 hurricane season. Their insurance covered the repairs with no questions. But, the innkeeper didn't have loss of income insurance, so the three months they were closed for repairs, they really lost income. That hurts any business plan!

One point I can't stress enough, so I'll keep repeating it, is homeowner's insurance isn't appropriate for a bed and breakfast. You may have insurance agents tell you they can cover you, but the moment you file a claim the underwriter will deny it because homeowner's insurance isn't for money-making situations. It's not even appropriate for rental property. Get business insurance, and make sure it covers every aspect of your business.

I had an innkeeping friend who years ago had a computer crash. He lost absolutely everything on his hard drive, and had no back-ups. The first lesson to share with you is to be sure to back-up your computer every night. The second lesson is to buy insurance to cover such situations. If he'd had computer insurance, he at least wouldn't have had to foot the bill of having someone re-enter all the lost data.

And though B&Bs are safer from the problems of theft than many other lodging properties, you should protect yourself and your guests by having theft insurance. I had a pair of silver candle sticks disappear from the piano of the B&B where I managed. I was heartsick because they belonged to the owner. It turns out some guests had borrowed them so they could have a candlelit evening. Filing that claim would have been hard, and it wouldn't have brought those candlesticks back, but we wouldn't have been out altogether.

Small business insurance coverages do vary from business to business, making an argument for using a B&B insurance agent because they know the bed and breakfast industry, making sure you are covered adequately. Rest easier and buy B&B business insurance coverage.

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