Flood insurance was designed to provide an alternative for disaster assistance. As repair costs escalate, something needed to be done. Communities implementing sound floodplain management have helped reduce the damage caused by floods. And buildings that were constructed in compliance with the National Flood Insurance Program (NFIP) building standards experienced about 80% less damage than those not built in compliance. Further more, for every $3 paid into flood insurance programs, $1 in disaster assistance was saved.
Having counseled aspiring innkeepers for close to 20 years now, I am still amazed at the number of people who think that homeowner’s insurance is sufficient to cover their B&B business. And worse yet, there are still agents out there who tell their clients they can cover the B&B in question! The moment you take money from someone so they can stay at your inn, your homeowner’s insurance is voided. Homeowner’s insurance doesn’t cover commercial applications. Don’t even waste your time getting homeowner’s insurance quotes.
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:
How do you pick an insurance agent — or insurance broker — for your B&B business or for your personal needs? Do you go with an independent insurance agent (you select an agent and they shop the different insurance companies for the best coverage), a B&B insurance agent (who is a specialized independent agent), or specific company representative insurance agents — or captive agents — (where you shop for the company you want to use and then work with one of their agents)? That’s a tough question, and a straight-forward answer is not available. Let’s look at the options.
Bed and breakfast innkeepers need medical insurance coverage to help preserve their assets. Unexpected health problems can drain your savings accounts to the extent that you don’t have any reserves for the business you are developing. That’s not what you want, of course. Private medical insurance is provided by employers, group or association plans, or by your own personal actions, and is the approach to insurance taken in the US. Much of Europe uses public medical insurance, or nationalized insurance.
Life insurance quotes don’t fall into the same category as the above quotes because it’s not prudent to change life insurance coverage since as we age our premiums go up with new policies, even with the same coverage. What you may want to consider though is evaluating your policy and determine if you need to buy additional coverage or drop some of the coverage you have. Your life insurance coverage could be a combination of whole life, universal life, and term life policies. Getting quotes for those various types of policies helps you evaluate your postilion and action.
Life insurance pays your beneficiary when you die. There are several philosophies on how to buy life insurance, ranging from just cover the funeral to give the survivors a fortune upon your death. Whatever your personal belief is on how much coverage to buy, be sure to buy something immediately. Some financial advisors recommend buying ten to fifteen times your annual income. It seems to me that the least amount you should buy is enough to cover your funeral expenses and to hire an assistant innkeeper to take over the chores you leave behind so your partner isn’t burdened with yet another “hat” to wear.
Have you considered offering travel insurance to your B&B guests as they book their reservations? It may be time to consider that offering. Travel is increasingly uncertain these days, so offering a bit of comfort is a gracious gesture to make. It increases not only your guests’ comfort, but yours too, because it covers everyone’s financial position.
Health insurance is a “must have” coverage for bed and breakfast innkeepers, even if it seems expensive. Depending on your general health, there are affordable health insurance policies available, but any health coverage is better than paying all of your own care should you get sick. Group insurance insurance is available through various associations you belong to, and if that’s not an option find individual health insurance. Group health insurance versus self-employed health insurance coverage will give you the same sort of coverage if you shop carefully.
Bed and breakfast innkeepers owe it to themselves to get auto insurance coverage on any vehicle they are using for business. Whether you are running errands like grocery shopping or buying flowers or taxing guests, the car being used needs good coverage. You want insurance that will cover your business assets if you are involved in an accident. You can opt to have an insurance agent who will help you get the best coverage for your situation, or you can shop for your auto insurance online. Cheap auto insurance may not be the same as discount auto insurance because of what’s covered and how claims are handled; shop carefully. Note: you may not be able to get a quote online if you have an older car, if your car is registered out of state, or if you have more than five drivers you are insuring.