House Insurance - What To Cover
A guest house insurance policy can include so many
different things that a standard household just
wouldn't cater for and includes liability cover
specifically for guesthouse owners and their paying
guests. If you take in paying
guests then you need to know the cover on the policy
is adequate for your own requirements.
Below we have compiled a list of what you can
generally cover under a guest house insurance
policy, although sums insured and terms can vary on different
Your guest house insurance policy will normally
cover the buildings and contents against the
following perils. Fire, lightning, explosion,
aircraft, storm, flood, escape of water, theft,
impact by vehicles or animals, riot, civil
commotion, malicious damage and accidental damage.
Subsidence, ground heave and landslip cover can also
be included although some companies include this
cover as standard.
If you own the property.
This covers the main property, small outside
buildings, walls, gates and fences against the
standard perils. All policies cover buildings
on a 'new for old' basis which means they will
repair and build the property back to the condition
it was before the event. There is nothing
taken off for wear and tear.
If you have a mortgage on your guest house, then you
will normally have to take out guest house buildings insurance
cover. It's advisable to cover this under a
guesthouse insurance package rather than covering it
separately. The mortgagees will also request the
buildings are insured for a certain amount.
or Tenants Improvements
Don't own the property. If not owned but you
yourself have made any improvements to the building
you may want to insure their value This could
include partitions, wood flooring, fixed bars or
kitchen units etc.
Contents cover can be included under your guest
house policy for an additional cost. Although
optional, it's definitely advisable to insure your
contents against the perils noted above. Contents cover is broken down in to different
section which are listed here.
Covers all the contents which guests will have
access to or which will be used in conjunction with
your business, i.e. furniture, carpets, cooking
Stock (In Trade)
Covers the stock in trade for standard perils
like food, or any other items that you may sell.
Covers damage to frozen or chilled stock in any
freezer, in the event of breakdown of refrigeration
units, usually less than 10 years old or accidental
failure of public electricity supply.
Cigarettes, Cigars & Tobacco
As it says, this covers the stock of cigarettes,
cigars and tobacco. This is often added to a
policy if you have a public bar.
Wines & Spirits
If your guest house is licensed and you sell
alcohol you may require cover for wines and spirits. Again this can be a popular feature if you have a
This can be a very important cover to have included
under a guest house policy. If your property is
damaged by one of the insured perils, for example a fire, and you are unable to let any
rooms out for 12 months whilst the property is being
repaired then you will lose out on your income due
to the rooms not being let out. This section
will reimburse you for your financial losses.
Most guest house policies include cover against for
example human diseases, food or drink poisoning,
murder, suicide, failure of public utilities and
failure in telecommunication systems at the
Although most policies will automatically included
this cover, it's worth making sure you are
Goods In Transit
Covers stock whilst in transit for damage
caused, say if the vehicle has an accident and it
ruins your stock.
The buildings section will normally cover glass
in windows or internal doors, and contents cover
will cover the glass in fixed items like a display
cabinet etc. If you don't own the property
then you may still be responsible for damage caused to
Fixed External Signs, and Canopies
Covers any external signs and canopies outside your guest
houses which normally advertise your guesthouse on
Loss Of Licence
If you have a licensed guest house, i.e. you
sell alcohol, then you may require loss of licence
cover. It covers the reduction in value of your
business as a result of non-renewal or withdrawal of
your licence from causes beyond your control.
This can cover money, crossed cheques, postal
orders kept at the premises during and outside of
business hours which may be stolen or damaged by one
of the standard perils.
Personal Effects Of Customers, Guests and
As it says it covers customers, guests or
employees personal effects, like baggage etc for the
standard perils. Some company's include cover for
this automatically and some will offer it as an
optional extra for an additional premium.
Cover is provided for costs incurred in pursuing
or defending the legal rights of the business in
relation to statutory employment and taxation
legislation, contract disputes and in pursuit of
common law actions against third parties for
nuisance and property damage. You will normally be
charged extra for this cover.
If you provide catering outside the guest house
then you may require extra liability cover. Most insurers will charge extra for this and is not
normally automatically covered under policies.
Own Personal Contents
If you have your own private quarters within the
guest house it's advisable to include cover for your
own contents and valuables, like furniture, clothing
etc, against the standard perils.
Unspecified Personal Possessions
If you take any of your contents AWAY from the
property, then you may want to insure them whilst
outside the guest house, like jewellery, cameras,
video cameras, glasses etc. This section includes this
cover, usually for an additional fee.
Public, Products and Employers Liability Cover
All our policies automatically include public
and products liability for £2,000,000 and employers
liability cover is available for £10,000,000. This gives
you protection against your legal liability for
bodily injury to third parties or employees and
damage to their property etc. This is
potentially the most important part of your guest
house insurance policy. Please ensure you have
adequate liability cover as owner of a guest house.
There are other 'material facts' which you will also
need to consider and inform your insurance company
about to ensure adequate cover is maintained. Some
of them include:
Do you have a licence to sell alcohol at your guest
house to guests. If so, we must know about it.
Cooking Frying Range
What type of cooking apparatus do you have at the
premises. Insurance companies are fine with table
top fryers, but they can apply restrictions if you
have a fish and chip style frying range, please let
Bar Open To The Public
Do you have a bar in the guest house which is open
to the guests. Some guest houses have bars
which are for guest use only, but if it the public
can also come in for a drink then companies rate
this as a higher risk so must be informed.
Does your guest house have a swimming pool, a gym,
does it have a lift, sauna or even a children's play
area. If so, then your insurers must be
informed about them as they are very high risk to
insurance companies and failure to tell your
insurance company about these could invalidate a
Contracts With Local
Do have any a contract with the local authority or
DSS to take in any of their customers. If so
let us know how often you take in these customers as this
affects your policy and most insurers will not even
offer a quote if you decide to take in this type of
If you provide any live entertainment at the
premises or arrange any events for guests then we
must know as this can affect your policy.
Some guest houses shut down during winter to take a
break. If your guest house is unoccupied for a
period of time then the insurers must know about it. Depending on the length of unoccupancy
(usually over 30 days), certain terms
will be applied to your policy is respect of theft,
escape of water, etc. It's obviously a higher
risk to the insurance company as it's then prone to
all types of claims.
If you have made any claims on previous policies,
please make sure you tell your insurers, no matter
how small they were. Failure to disclose
previous claims will more than likely invalidate
your policy and any future claims may not be paid.
Just be honest with the insurance companies and they
will be fair in the event of a problem.
The situation of your property obviously makes a
difference to the price you pay. Your postcode
will give the insurers an idea of the area, but you
must also inform your insurance company if the
property is close to a river, canal, sea,
watercourse, cliff or quarry, or in an area which is
at risk from subsidence, heave or landslip etc. All these are material facts, which they must know
about and again could affect your policy.
All insurance companies will have a standard excess
for claims. This is the amount you will have to pay
towards a claim and often starts from £150-£250. E.g. -
Someone with a £250 standard excess has a fire
claim for £4,000 and is paid out less the £250
excess - that someone
would receive £3,750 back from the insurance
company. These standard excesses can often be
increased for a reduction in your annual premium.
A subsidence, heave or landslip excess is often £
1,000 as standard, unless the property is in a
Additional excess's may be applied for high risk
theft or flood area's. Please read your insurance
terms to ensure you fully understand how much you
will have to pay towards a claim
the above gives you a better understanding of what a
guest house insurance policy can cover, but if there
is anything else that you wish to know about on the
policies or any aspect of the cover then please don't hesitate to
contact our office on 01288 353999.