Not surprisingly, in these economic times and with airport duty on the rise, tourism is one of the largest industries operating in the United Kingdom. Turning over £2,000,000,000 a year, the Bed and Breakfast part of the sector occupies around 35% of the entire hotel business. Although this makes it a highly competitive market, good service, clean premises, and polite & helpful staff are still greatly sort after. This will no doubt increase your rate of occupancy should you choose to enter the industry. As with any business that involves keeping guests happy and looking after their health and safety, insurance for a Bed and Breakfast business needs to be properly revised and appropriately arranged.
Whether you choose to buy purpose built premises, or convert your own home for guest accommodation, you will require far more cover than standard householders insurance – although the building itself would be covered in a similar way to regular house holders insurance, for loss against flood damage, fire, subsidence, lightening, explosions etc. Below are some of the types of cover you will need to consider in this particular line of business.
Apart from your own contents and area of living (if this applies), there is also the business contents. This will cover you for all the areas that the guests have access to and contents that are used as part of the business. You can also cover any monies or cheques held on the premises.
You will of course need to have in place the appropriate licence before selling alcohol to the public. Stock such as perishables and refrigerated goods are vulnerable to breakdown and may also need to be covered against loss or damage. Certain clauses such as the age of the refrigerator or cooking appliances will apply and reputable insurance companies will advise you on what is valid and what is not.
Should your business be unable to function as normal due to flood damage, fire etc, then business interruption insurance could be a very valuable option. Renovating a property after any damage can be a lengthy process and could make your rooms inaccessible and therefore considerably reduce your income. Many businesses are now having to find ways of earning extra money and opening a bar selling wines, spirits, beers & cigarettes may be a viable option. Should you then have your licence revoked and are unable to trade in alcohol this can have an adverse affect on the value of the business. You may wish to have this extra cover added to your policy. Another consideration will be whether you choose to open the bar to the public as well as your guests. This will undoubtedly increase the risk to your property and guests`, and therefore increase the cost of your cover.
Public and employers liability
Public liability insurance will cover the general public against negligence, accidents or even infectious diseases whilst they are present on your property! It is the law to have employers insurance should you choose to take on employees.
There are many other areas to consider when taking out insurance for the Bed and Breakfast business. Some examples:
Will you shut down during the winter? Do you intend to allow guests to hold their own events on your premises? Will outside caterers be entering your premises, or will you provide catering for outside events?
B&B property insurance may seem complicated and time consuming, but providing you are honest with your broker and inform them of any changes you undertake in the future, then they will be able to help you and offer advice on the most suitable policy for your specialised business.