Running a Bed and Breakfast: Is Homeowners Insurance Enough?

For those who are able and willing to operate a bed and breakfast out of their own home, a profitable business often awaits — at least, if all measures are taken into consideration.

Potential innkeepers should consider the various factors attributed to their bed and breakfast — such as how much they’ll charge guests and how they’ll interact with them — in order to ensure that the business is prosperous.

Among one of the most important components of running a bed and breakfast out of your home is that of the different insurance coverages that are required, and how much it may cost you. Despite running the business out of your home, this does not mean that extra insurance policies aren’t necessary. Given that you’ll be running your business out of your house, it is vital that innkeepers attain the coverage needed to protect themselves against any accidents or issues that may arise.

So before you get out your homeowners insurance calculator, check out a few of the extra insurance types you may need if you plan on operating a bed and breakfast out of your home:

Property Insurance Coverage

This one is important because it goes beyond the typical homeowners insurance coverage. Having property insurance when running a bed and breakfast protects you against any damage to the building that may occur, and property used for operating the business.

Things covered under property insurance include business papers such as receipts and invoices, tech equipment like computers, or any detached buildings you may be using to run the bed and breakfast, to name a few. Having these bases covered keeps you protected against any property-related complications.

Liquor Liability

Who doesn’t love mimosas in the morning, especially when waking up in a bed and breakfast? Well, as an innkeeper, if you plan on distributing alcohol on your premises, regardless of whether it’s a sale or not, having liquor liability is a must.

Liquor liability coverage protects you against any problems that may arise from a guest having too much to drink, and if they inadvertently injure themselves or someone else. No matter how careful you might be, having liquor coverage is crucial if you have any plans to provide guests with alcoholic beverages. On the other hand, not serving alcohol but instead having your bed and breakfast be BYOD-friendly would free you of liability concerns in the event an under-the-influence guest injures a third party, since you wouldn’t be considered “in the liquor business.”

General Liability (GL)

This is when only having homeowners insurance isn’t enough. As the owner of an innkeeper, you’ll have numerous guests coming in and out daily, walking up or down stairs, and perusing the property during their visit. All this activity greatly increases the possibility of a potential fall or injury, so you should make sure you’re covered.

Having general liability insurance protects you if a guest injures themselves or damages any on-site property, and then claims negligence of the business place as the cause. This way, regardless of any accidents which may arise, you can rest easy knowing that your GL insurance policy covers these potential issues.

Workers’ Compensation and Employment Practices Liability

If your bed and breakfast continues to grow, you’ll soon find that you may need to hire extra help to run things smoothly. When deciding to do this, it is important to find employee-related insurance policies to protect both yourself and the workers brought on board.

Generally speaking, workers’ compensation will cover any injuries that may occur while an employee is on the job, while employment practices liability (EPLI) will protect against claims of illegal or wrongful employment practices as a whole. As your bed and breakfast grows, you’ll see it start looking more and more like a business, and so you should take careful note to treat it as one.

The decision to start a bed and breakfast is an exciting one for many property owners. The hospitality business is not only enjoyable, but also provides an added layer of responsibilities and guidelines that must be adhered to. By keeping an eye on the different types of insurance required to operate your bed and breakfast, you can ensure all legalities are taken care of, and your business is running smoothly and safely.


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