If you own a property in a desirable area for business or leisure travellers, opening a bed and breakfast can be a great low-cost, high-margin business venture. However, if you don't get the right insurance and something goes wrong, you'll quickly find yourself with very expensive lawsuit or property repair costs that could financially ruin your business for good.
Thankfully, as long as you have business insurance, you can rest assured that you'll be able to financially handle any problems thrown your way. Here are three types of coverage that are essential for bed and breakfast businesses.
1. Public Liability Insurance
Public liability coverage is what protects you if one of your guests gets injured or their property gets damaged while staying at your bed and breakfast. There are many ways guests can get injured. They could slip on a wet floor in the dining area, for example, or fall in the night because of a blown light bulb. Likewise, property damage is not common. Imagine, for example, that a pipe bursts in your bed and breakfast; the water damage could quickly destroy your guests' gadgets. If one of your guests incurs an injury or property damage and they decide to file a lawsuit, public liability will cover your legal fees and the guests' compensation so that your business doesn't go bust.
2. Business Contents Insurance
Alongside protecting against your guests' property damage, you should insure yourself against a breakdown of your own property. This type of insurance is called contents insurance. It can cover you for a wide variety of fixtures and furnishings, such as beds, linens, refrigerators, ovens and more. If you provide amenities like TVs, computer access and other entertainment gadgets, you'll want to cover these too, as they can be very expensive to repair or replace. You may also want to look into business stock insurance, which pays out if your food, drinks and toiletries are damaged by flooding, fire and other mishaps.
3. Guest Effects Insurance
While public liability insurance would cover you if a guest's possessions got damaged at your bed and breakfast, and they decided to file a lawsuit, you can often avoid a lawsuit altogether with guest effects coverage. This insurance will cover any loss or damage to your guest's personal possessions (such as laptops and clothes) and their motor vehicles if you have a parking lot. Most guests only file a lawsuit to receive financial compensation for their possessions; if you have guest effects insurance, you can compensate them yourself before it reaches a courtroom. You may also want to get effects insurance for your employees' possessions too.