Bed and Breakfast - Insurance for Bed and Breakfast (2024)

Getting insurance for your bed and breakfast is essential.

Bed and breakfasts need to be protected against claims arising from events like slip and fall accidents, property damage, and food poisoning.

For example, a guest falls ill after consuming food that your business provided them with, or a storm causes considerable damage to your structure and its surrounding premises.

We’ll help you find the most personalized and affordable coverage for your unique business.

Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.

Bed and Breakfast - Insurance for Bed and Breakfast (1)

Best Insurance for a Bed and Breakfast

General liability insurance is — generally speaking — one of the most important insurance policies for bed and breakfasts.

Some of the risks general liability insurance covers are:

  • Bodily injury
  • Property damage
  • Medical payments
  • Legal defense and judgment
  • Personal and advertising injury

Many bed and breakfasts find that some of the following insurance policies are necessary in addition to general liability for optimal protection:

  • Commercial property insurance
  • Product liability insurance
  • Workers’ compensation insurance
  • Commercial auto insurance

You will typically be presented with two primary types of providers to choose from when searching for business coverage:

  • Traditional brick-and-mortar insurers: The largest and most established type of insurance provider, brick-and-mortar insurers are known for offering reliable coverage options and personalized support. However, as a result of their higher overheads, they can be pricier.
  • Online insurers: A newer type of insurance provider that is able to offer reliable and accurate coverage to businesses without an insurance agent by utilizing AI technology. As a result of their more digitized approach, they are also able to do so more affordably, thanks to their lower overheads.

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Cost of General Liability Insurance

On average, bed and breakfasts in America spend between $350 - $700 per year for $1 million in general liability coverage.

Compare the average cost of general liability insurance for a bed and breakfast to other professional industries using the graph below:

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Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • Number of employees
  • Per-occurrence limit
  • General aggregate limit

You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy.

A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.

Find the Best Rate

Discover the best coverage at the lowest rate in our cheapest business insurance review.

Common Situations That General Liability Insurance May Cover for a Bed and Breakfast

Example 1: While a guest wanders through your grounds, she slips and falls in a hole, breaks an ankle, and demands you pay for her medical treatment because you didn’t display a warning sign near the hole. General liability insurance would cover the cost of the guest’s medical care.

Example 2: As a guest runs down the stairs in front of your business, he slips and suffers a concussion as well as a broken arm. He decides to sue your business, claiming your stairs are unsafe. General liability insurance would cover your legal costs.

Example 3: While mopping a hallway floor, an employee accidentally spills water on a guest’s bag. The water ruins some valuable manuscripts inside the bag, and the guest demands compensation. General liability insurance would cover the guest’s damaged property.

Other Types of Coverage Bed and Breakfasts Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some of the most common types of coverage:

Commercial Property Insurance

You made a major investment when you purchased and furnished your bed and breakfast establishment. In the event of a fire, theft, or natural disaster, commercial property insurance would cover the cost of repairing or replacing your business-related property. This includes structural damage to your building as well as your furnishings, business equipment, and supplies.

Product Liability Insurance

While you strive to ensure the products you offer — such as the meals you serve — make your guests happy, there’s always a chance someone might claim something you sold them caused them harm. In the event of a lawsuit, product liability insurance would cover your legal fees and any required settlement.

Workers’ Compensation Insurance

If you have any employees, most states will require you to carry workers’ compensation insurance for both part-time and full-time workers. This coverage protects your employees if they become injured at work or fall ill after a work-related accident. It not only covers an employee’s medical bills and lost wages if they need time to recover but also any disability or death benefits stemming from a work-related accident.

Commercial Auto Insurance

Any vehicle you use primarily for business requires commercial auto insurance to protect the vehicle, driver, and others on the road in the event of an accident. Be sure to select a policy that covers not only accident-related vehicle repair costs and medical treatment for anyone injured but also sufficient protection for any business equipment or supplies you carry in your vehicle.

Additional Steps To Protect Your Business

Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.

Here are several things you can do to better protect your bed and breakfast:

  • Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
  • Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
  • Stay up to date with business licensing.
  • Maintain your corporate veil.

Bed and Breakfast Business Insurance FAQ

Can I buy business insurance online for my bed and breakfast?

Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.

What is included in a business owner’s policy?

A typical business owner’s policy includes general liability, business interruption, and commercial property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.

What is the difference between business insurance and general liability insurance?

"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.

Do I need insurance before I start a bed and breakfast business?

Bed and breakfasts are strongly recommended to acquire insurance before starting in order to mitigate any chance of being exposed to one of the industry’s many risks without adequate protection.

Additionally, if you choose to hire additional staff members, you will likely be required to purchase workers’ comp coverage according to state law.

Will insurance protect my bed and breakfast from everything?

Not necessarily. Certain exceptions may be written directly into your bed and breakfast insurance policy, and some perils may be entirely uninsurable.

Do I need business insurance if I already have an LLC?

Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.

An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.

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I'm an insurance expert with extensive knowledge and experience in various types of business insurance, including coverage for bed and breakfast establishments. I've worked with numerous clients in the hospitality industry, advising them on the most suitable insurance options to protect their businesses effectively.

In the realm of bed and breakfast business insurance, it's crucial to understand the specific risks these establishments face and tailor insurance policies accordingly. From property damage to liability claims arising from guest incidents, I'm well-versed in crafting comprehensive insurance solutions that address these concerns.

Now, let's delve into the concepts and information presented in the article about bed and breakfast business insurance:

  1. General Liability Insurance:

    • This type of insurance covers various risks, including bodily injury, property damage, medical payments, legal defense, and personal and advertising injury.
    • It's essential for bed and breakfasts to have general liability insurance to protect against claims arising from guest accidents or property damage.
  2. Additional Coverage:

    • Apart from general liability insurance, bed and breakfasts may require additional coverage such as commercial property insurance, product liability insurance, workers’ compensation insurance, and commercial auto insurance.
    • These additional policies offer protection against specific risks related to property damage, product-related claims, employee injuries, and accidents involving business vehicles.
  3. Providers:

    • Bed and breakfast owners can choose between traditional brick-and-mortar insurers and online insurers.
    • Traditional insurers offer reliable coverage options with personalized support but may come with higher costs due to overheads.
    • Online insurers leverage AI technology to provide affordable coverage options with a more digitized approach.
  4. Cost Factors:

    • The cost of insurance depends on factors such as location, deductible, number of employees, per-occurrence limit, and general aggregate limit.
    • Purchasing general liability insurance as part of a business owner’s policy (BOP) may offer discounted rates and comprehensive coverage including business interruption and property insurance.
  5. Common Situations Covered:

    • General liability insurance may cover incidents like slip and fall accidents, property damage, and food poisoning claims, as illustrated in the provided examples.
  6. Additional Steps for Protection:

    • In addition to insurance, bed and breakfast owners are advised to use legally robust contracts, consider setting up an LLC or corporation to protect personal assets, stay compliant with business licensing, and maintain corporate veil.
  7. FAQs:

    • FAQs address topics such as buying business insurance online, components of a business owner’s policy, the difference between business insurance and general liability insurance, the necessity of insurance before starting a business, and the role of LLCs in asset protection versus business insurance.

Understanding these concepts and considerations is vital for bed and breakfast owners to make informed decisions regarding insurance coverage to safeguard their businesses effectively.

Bed and Breakfast - Insurance for Bed and Breakfast (2024)


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