Homeowners or business insurance?

6 replies [Last post]
notAgrandma's picture
Offline
Joined:
07/07/2017

Some innkeepers finance their B&B using home mortgage and some use a business loan. I was just wondering, does everyone have business insurance? I'm currently with State Farm and my business insurance is thousands of dollars a year. It's one of my highest operating costs. I asked my agent what my insurance would be for just a homeowner's policy and it's half of what I currently pay! Hmmm....

Is business insurance always necessary? Or would homeowners insurance be sufficient for an innkeeper?

__________________

Your character is what you really are, while your reputation is merely what others think you are. - John Wooden

 

Offline
Joined:
02/15/2017

Ditto to all the above!

Momma Smurf's picture
Offline
Joined:
12/06/2010

Absolutely business insurance for a myriad of reasons.  Ours is now about $3650 ($2500 Deductible)  I consider that reasonable.  (Last year we got a brand new $36K roof due to minor hail damage with no push back.)  If your insurance company discovers that you are operating a business which increases risk, you risk losing any claim which was a result of having paid guests in your "home".  What if a guest causes a fire?  Insurance rates are based upon potential liability, by having hundreds of guests in your home, you increase that liability which is out of the scope of the original terms. 

__________________

The Truth and an Open Mind Shall Set You Free

 

gillumhouse's picture
Offline
Joined:
05/22/2008

When our insurance costs jumped drastically, we thought about just closing and getting homeowners insurance. The difference in the rate did not justify the loss of revenue so we stayed open. I dropped Wolf because, with no employees, I did not need a lot of their package. 

I went with Erie Insurance setting a value on the house as a rebuild a dwelling, not replacing the B & B (they keep increasing that value which is why it has gone up a few hundred), an amount for contents & outbuilding, and a liability now at $1M, and I have a rider on my insurance covering the Historical Association for when I use the log house for elopements. I think I got them 15 years ago and the rate has gone from about $1300 to almost $1800 this year. Wolf was $2500 when I jumped ship.

Generic's picture
Offline
Joined:
02/24/2011

We have a homeowner's policy with a B&B rider. But we are in a different country. And the government actually verifies that I have a policy.... it's part of the licence.

__________________

Permission to quote in whole or in part, other than usage on this forum, is entirely forbidden.

 

OnTheShore's picture
Offline
Joined:
08/28/2011

Insurance companies will look for ways to avoid paying claims, because that is how they make money. Read the exclusions on any policy very very carefully. Chances are that a homeowner's policy will not cover any claim arising from your business activity, and might not cover you at all (for any claim) since they could argue that they can't tell whether the claim did or did not arise as a consequence of your business use of the property. The rates for business policies are higher because the exposure and potential liability of a business is higher than for a homeowner who is not conducting business in their home. Plus the business policy will cover things, like loss of business income as a result of a covered event, that a homeowner's policy doesn't even consider.

__________________

"where even time relaxes...."

 

Morticia's picture
Offline
Joined:
05/22/2008

Your homeowner's policy would not cover you in case you were sued for food poisoning or a guest falling down the stairs. You might also lose your policy if a guest did sue you. Or, if you tried to claim a loss due to a guest.

You would at least need a rider for in home occupation.

Better to try to find a cheaper business policy.

__________________

Never judge a person's story by the chapter you walked in on.

 

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.