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Guest house insurance in 2023. What is guest house insurance?

Guest house insurance in 2023. What is guest house insurance?

Running a guest house or a bed and breakfast business can be very rewarding but comes with many risks. The best aspect of running a guest house may be providing a welcoming stay for your guests while being your own boss.

With that comes the risks you must consider, from damage to your guest's belongings to faulty freezers or a kitchen fire. The risks are many, and you face them daily on your premises.

Standard home insurance policies typically won't cover you and your guests for all of these risks that you face. Therefore, you need to buy specialist guest house insurance.

Even minor incidents can turn into large claims - if you host paying guests, you'll want to ensure you're adequately covered.

This guide to guest house insurance will provide you with all of the information you need to decide on the coverage you need.

Table of contents

  • What is guest house insurance?
  • What does guest house insurance cover?
  • Types of guest house insurance
  • Additional guest house cover
  • Guest house insurance FAQ
  • Guest house insurance cost

What is guest house insurance?

Running a guest house or a small hotel usually means sharing your home with guests. This is a niche service compared to a larger hotel, and most hotel insurance policies won't cover it.

Furthermore, standard home insurance isn't enough to cover you and your premises when you run a guest house. Therefore, it's imperative to have the right insurance in place.

Guest house insurance can cover damage to your property, your customers' possessions, and injuries on your premises, which could result in legal matters.

You will need a specialist business policy tailored to protect you and your business from unexpected financial losses. That way, you can continue to trade if your guest house suffers any mishaps.

What does guest house insurance cover?

Like many insurance policies, it's possible to find a standard package policy combining more than one coverage for your guest house.

In addition to the package policy, you can add on other coverages that suit you, personalized to your business. That way, you can cover everything you want and need.

The best thing about creating a customized policy is that you only pay for what your business requires.

It's common practice that most guest house plans come with public liability, product liability, business contents, and guest effects insurance as standard.

Types of guest house insurance

The following list is the range of cover options for a bespoke business policy. You may want to consider these coverages to protect your guest house to keep it running smoothly.

Public and products liability

You are exposed to many risks while working with the general public in the hospitality industry.

Public and product liability insurance can protect you in two ways. Firstly, it can provide financial protection against damage to someone else's property.

You will also need public liability insurance to cover you for injuries sustained by a guest on your premises. For example, if someone suffers food poisoning caused by your kitchen staff or if they trip over uneven flooring.

Employers' liability

Whether you have full-time or part-time staff, permanent, temporary, or voluntary staff, it is a legal requirement to have employers' liability insurance.

This insurance type will protect you and your employees if they sustain an injury or become unwell while working for you. Whether you employ one or ten people, you are legally obligated to have this coverage.

Loss of income

This insurance coverage can protect you if you cannot run your business due to an event outside of your control.

For example, if you experience a fire on your premises, this policy will ensure you aren't out of pocket. Loss of income will compensate you if an event outside your control stops you from trading.

Money cover

This coverage will ensure you are protected against any theft. Your money cover policy can pay for both the loss of money due to the theft of any business money or personal money from your premises.

This cover typically protects your family members, but only those who live with you at the property (business).

Guest effects

This insurance covers customers, guests, and employees' personal effects, such as luggage and personal belongings, for the standard perils such as theft and damages.

Some insurance packages will include this cover automatically, or it might be a chargeable extra. It's worth verifying what coverages are contained in a package policy.

Business contents and stock

This coverage would come in handy if you suffered a burglary on your premises or a fire, for example. It can cover possessions such as curtains, linens, furniture, and kitchen equipment.

Business contents and stock cover will pay for any expenses for replacing or repairing any of your insured business items.

Building cover

This insurance coverage will protect you if something happens to your guest house fixtures and fittings. From damaged walls needing fresh paint or old pipes needing repair work, building insurance can cover you for costly expenses.

Not only repair work is covered, but building cover can usually help to pay for rebuilding the structure of your guest house from scratch.

Additional guest house cover

Here are some additional cover extensions to add to your bespoke business policy. These options may not be necessary. However, it's best practice to cover the worst-case scenario.

Business Interruption

This insurance type will protect you if you can't trade for any reason related to theft or damage to your pub's essentials.

You will be compensated by business interruption insurance for the loss of sales if you cannot work due to various reasons, from renovations, thefts, or unexpected weather events.

Business interruption can cover you if you are affected by damaged and stolen stock and contents or damaged buildings.

Legal expenses

This coverage will protect you if you have to pay for legal expenses connected with your business.

Legal expenses insurance can protect you from expensive legal fees, whether you have to pay for compensation payouts or defense costs.

Cyber liability insurance

If you accept bookings through telecommunications, you should consider cyber insurance. Even if you accept online bookings through a third-party provider, your business could be severely affected if your services are hacked.

If your guests' personal data is breached, cyber liability insurance will help to cover the expenses for data recovery, investigative services, lost income, and lawsuits.

Deterioration of stock

This coverage will help you to replace food items that are damaged, stolen, or destroyed.

In the event that your electricity supply fails or your refrigeration units break down, deterioration of stock (or stock and freezer cover) will pay out for replacement stock.

Employment practices liability insurance

This specialized coverage protects you from employment-related claims, such as harassment, discrimination, and wrongful termination.

Employment practices liability insurance is not the same policy as an employer's liability insurance.

Commercial auto insurance

You should consider commercial auto insurance if you have a work vehicle.

This insurance includes liability coverage, which covers you for accidental injuries and property damage you cause to others.

Key takeaways

Your home insurance policy won't provide enough cover for your guest house.

You must have employers' liability insurance if you hire employees.

Public liability insurance is a vital component of guest house insurance.

You should consider add-ons to cover the worst-case scenarios you may face.

Ask your insurance provider if you have any questions about pre-made customized package policies.

Guest house insurance FAQ

Do I need business insurance to run a guest house?

Some business coverages are required by law, such as employers' liability insurance. This is mandatory even if you have one employee on a temporary or part-time basis.

Regarding the other types of insurance that aren't required by law, they should be considered as a requirement to protect you if something happens.

Guest houses face many risks, and the chances for issues are high. For example, your business could be held liable if a guest gets food poisoning or is injured after falling down the stairs.

Does my house insurance protect my guest house?

No, your house insurance won't cover your business activities. You must buy separate policies for your home and your business.

Without insurance, you could face costly claims, fines, legal expenses, and compensation payouts, which could force you out of business.

Does it matter if I live in my guest house?

You need specialist insurance to protect you even if you live where you run your business. This is especially important to protect you against damages and liability claims.

Do I need insurance to rent on Airbnb?

You will benefit from specialist business insurance if you rent a room, annex, or an entire property on Airbnb or a similar hosting platform.

What else do I need to consider?

You should ensure that your policy offers you the coverage you need. Check the policy details to find out what is included as a standard cover and whether you need to consider add-ons.

Selling alcohol to guests will be a profitable part of your business if you run a licensed guest house.

If your license is withdrawn due to unforeseen circumstances outside of your control, loss of license insurance is an add-on coverage that can cover your losses.

Guest house insurance cost

Like most insurance policies, the cost of guest house insurance depends on numerous things, including the level of coverage you need and which add-ons you choose.

Personal factors will be taken into consideration, such as claims history and how long you've been running your business.

Guest house insurance packages vary to suit each unique business. Therefore, the costs fluctuate depending on several factors, including:

  • The number of guest rooms
  • The location of your business
  • If your business is licensed or not
  • How many employees work for you
  • What type of food your business offers
  • What add-ons are included in your plan
  • The amount and type of coverage needed

Other personal considerations are factored in, such as:

  • Your past and current claims history
  • How many business properties you own
  • The duration your business has been running

Guest house insurance quote

Running a guest house is a life's work and a labor of love. Having the right coverage gives you peace of mind that your reputable business can keep trading without any mishaps.

Whether you run a small guest house or rent out a spare room, our insurance experts can help you choose the coverage for you.

With 35 years of experience, Pitsas Insurances can guide you to make the best choices according to your needs. We can help you choose the coverage that fits your particular budget and requirements.

Ensure you have your information ready when applying for a quote. You will need to provide some details, such as:

  • Business name and address
  • The number of staff you hire
  • How long you've been trading
  • Estimated annual turnover
  • Your claims history
  • The type of cover you want

Business insurance USA

For companies registered in the USA, you can receive quotations from Progressive Commercial.

Business insurance UK

For companies registered in Britain, you can receive quotations from Simply Business.

Business insurance Cyprus

For companies registered in Cyprus, you can receive a quotation from Pitsas Insurances by completing the quotation.

If you have any more questions, contact our insurance experts and work with a licensed agent. We offer a fast turnaround.

For more about how our team of insurance experts can help you, see here.

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