Company insurance is intended to safeguard the financial assets of a business owner and is a vital investment for a bed and breakfast.
This article will discuss the primary insurance coverage for bed and breakfasts, general liability insurance, as well as additional policies that are appropriate for this industry.
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Bed and Breakfast General Liability Insurance
Every firm, regardless of sector, has risks that should be insured. General liability insurance is the most frequent and comprehensive form of coverage that company owners purchase.
General liability insurance covers the following risks:
Physical harm
Damage to property
Medical expenses
Legal defence and decision
Personal and commercial harm
While general liability insurance is not legally needed for companies, operating without it is exceedingly dangerous. If your company is sued, you might face costs in the hundreds of thousands of dollars (or more). The only way to avoid this sort of catastrophe from destroying your organisation is to have an adequate general liability insurance coverage in place to assist pay for these losses.
GENERAL LIABILITY INSURANCE MAY COVER COMMON SITUATIONS FOR A BED AND BREAKFAST
Example 1: A visitor walks through your grounds and slips and falls in a hole, breaking her ankle, and claims that you pay for her medical care since there was no warning sign near the hole. The expense of the guest’s medical treatment would be covered by general liability insurance.
Example 2: A customer is running down the steps in front of your establishment when he falls and receives a concussion as well as a fractured arm. He chooses to sue your company, saying that your stairs are dangerous. Your legal expenses would be covered by general liability insurance.
Example 3: An staffer accidently splashes water on a guest’s bag while washing the hallway floor. The water destroys some important documents within the suitcase, and the visitor seeks restitution. The guest’s damaged property would be covered by general liability insurance.
Of course, this is not an entire list of risks covered by a general liability insurance policy, and certain situations may result in a specific peril not being covered. To minimise coverage gaps, it’s always better to speak with your agent about the terms of your policy.
General Liability Insurance Cost
Bed and breakfasts in America pay an average of $350 – $700 per year for $1 million in general liability insurance.
The cost of your coverage will be determined by a number of variables. Among them are your:
Location
Deductible
Employees’ number
Per-occurrence restriction
The overall aggregate limit
You may be able to get general liability insurance at a lower cost if you buy it as part of a business owner’s policy (BOP) rather than as a separate policy. A business interruption policy (BOP) is a more complete option that covers numerous types of coverage, such as business interruption and property insurance.
Other Types of Coverage Required by Bed and Breakfasts
While general liability insurance is the most crucial, there are various different types of coverage to be aware of. Other forms of insurance that every bed and breakfasts should have are as follows:
Insurance for Commercial Property
When you bought and outfitted your bed and breakfast, you made a significant investment. Commercial property insurance would cover the expense of repairing or replacing your business-related property in the case of a fire, theft, or natural catastrophe. This covers structural damage to your facility as well as furniture, office equipment, and supplies.
Insurance for Product Liability
While you work hard to ensure that the items you supply, such as the meals you serve, satisfy your customers, there is always the possibility that something you sold them did them damage. In the case of a lawsuit, your legal expenses and any needed settlement would be covered by product liability insurance.
Types of Insurance That Some Bed and Breakfasts May Require
In addition to the insurance listed above, your bed and breakfast may need other forms of coverage based on particular features of your business. Some of them may not apply to you, so be sure to ask your agent whether policies are appropriate for your company.
Insurance for Workers’ Compensation
Most states will require you to have workers’ compensation insurance for both part-time and full-time employees if you have any employees. This coverage covers your workers if they are hurt at work or get sick as a result of a workplace accident. It covers not just an employee’s medical expenditures and missed pay if they need time off to recuperate, but also any disability or death benefits resulting from a work-related accident.
Insurance for Commercial Vehicles
In the case of an accident, any car you use mainly for work needs commercial auto insurance to cover the vehicle, driver, and others on the road. Choose a policy that covers not just accident-related vehicle repair expenses and medical care for anybody harmed, but also enough coverage for any business equipment or supplies you transport in your vehicle.
Additional Security Measures for Your Company
Although investing in company insurance is simple (and necessary), it should not be your first line of defence. Yes, insurance will reimburse your company for cash losses incurred as a result of an occurrence, but it is much preferable to avoid losses altogether.
With this in mind, here are a few steps you can take to better secure your company:
Make use of legally binding contracts and other business agreements. (We provide free templates for several of the most often used legal forms.)
To safeguard your personal assets, form a limited liability company (LLC) or a corporation. (To discover how to incorporate an LLC or company in your state, see our step-by-step tutorials.)
Keep your company licences up to date.
Streamline the internal procedures of your company. This will eliminate unneeded variables from routine activities and establish a secure, consistent environment in which to do business.
If your company is an LLC, you should check into LLC insurance.