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Insurance Requirements for Bed & Breakfast Operators.

To ensure members have the correct insurance cover in place it is important to recognise that a Bed & Breakfast is a business activity being operated within the home. Scale of operation makes no difference, so if your operation is small and run on a hobby basis, or conducted on a much larger scale, you require the same insurance cover.

It is essential that the insurer of your property is aware that it is being used as a Bed & Breakfast. Failure to notify your insurer could easily be taken as non-disclosure and result in a claim being declined. Non-disclosure is by far the major cause of insurance claims being declined and it is incumbent upon you to advise your insurer of all material facts.

If you advise your insurer and they agree to cover your property, you should insist in having written confirmation as in the event of a loss you might need that documentation as evidence of cover. You should also check whether your property would be covered for damage caused by a guest (intentional and/or unintentional).

However, even if your insurer agrees to cover your property it is most doubtful that they will cover your liability in respect of guests' belongings or accident or injury to a guest or other property.

Public Liability covers should be arranged and apart from providing general liability cover, should also include Exemplary Damages which can result from an injury. Also cover should incorporate any liability assumed under the Innkeepers Act, which is a statute to protect the property of guests. This Act applies to Bed & Breakfast operators as well as Hotels & Motels. The policy should also provide protection against the Forest & Rural Fires Act (if applicable to your area) as coverage is for fire fighting costs that can be levied against landowners.

Statutory Liability cover is also important for protection against unintentional breaches of Acts of parliament. There are exclusions as explained in the policy. Cover would not be given for breaches of Criminal Acts for example, but would include such Acts as the Building Act and the Resource Management Act which can attract heavy penalties, not to mention the legal costs and expenses in defending charges.

The Act that is usually of greatest concern is the Health & Safety in Employment Act. This Act not only makes you accountable for employees but also for the safety of guests. Fines can be imposed up to $500,000 and the Act specifically excludes insurance for these fines. However, the insurance will cover the costs of defending an action and any reparation payable - the courts award this on a regular basis and can exceed the fines imposed.

This information is intended only as an outline of the covers required and more information can be obtained by contacting Vision Insurance who offer affordable packages suitable to the needs of bed and breakfast operators.

Vision Insurance (S.I.) Limited: Visit their Website www.visioninsurance.co.nz or phone on freephone 0508 031990. Also see their listing on this site or Email Vision Insurance directly.