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Guest 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 policies.

 

Standard Perils
guest house insurance quote | bed breakfast insurance cover imageYour 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.


Buildings
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
If you 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
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.


Business Contents
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 equipment etc.

Stock (In Trade)
Covers the stock in trade for standard perils like food, or any other items that you may sell.

Stock (Refrigerated)
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 public bar.

Business Interruption
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 property.
Although most policies will automatically included this cover, it's worth making sure you are adequately covered.

Goods In Transit
Covers stock whilst in transit for damage caused, say if the vehicle has an accident and it ruins your stock.

Fixed Glass
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 window panes.

Fixed External Signs, and Canopies
Covers any external signs and canopies outside your guest houses which normally advertise your guesthouse on it.

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.

Money
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 Employees
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.

Legal Expenses
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.

Outside Catering
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.


insurance quote guesthouse | guest house insurance | bed breakfast quotation imageMiscellaneous
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:
 

Licensed
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 us know.

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.

Other Amenities
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 claim.

Contracts With Local Authority
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 guest.

Events
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.

Unoccupied
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.

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.

Property Location
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.

Excess
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 subsidence area.
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

 

We hope 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.

 

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Hodgson Insurance Services is authorised and regulated by the Financial Conduct Authority. Our Firm Reference Number (FRN) is 306339. You can check this on the FCA register by visiting FCA's website www.fca.org.uk or by telephoning the FCA on 0845 6061234.    All materials guesthouseinsurance.co.uk