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Bed and Breakfast businesses can represent unique investment and business opportunities for the right kind of entrepreneur. According to the Professional Association of Innkeepers International, the leading B&B organization in the United States, the trait most characteristic of B&B owners is their love of people. Many of us fondly recall vacations where the beauty of the scenery was matched by the warmth and congeniality of our B&B hosts who went out of their way to make sure we found just the right stretch of beach for a family picnic, the ideal restaurant with just the right combination of good food and welcoming atmosphere, or simply knew where the fish were biting that day.

But needless to say, in today's competitive environment, a successful B&B owner/operator also needs a shrewd business sense, and this includes a careful understanding of insurance requirements. 

One unique concern is that many B&B owners continue to live in their B&Bs. Thus owners are subject to the normal risks associated with home ownership as well as commercial exposure that comes with operating a business on the premises. This unique overlap of private residence and public business means that B&B owners must be careful not to neglect one aspect of their insurance requirements for the other.

Your insurance coverage needs will begin with general liability coverage which will protect you from personal injuries to guests and visitors as well as property damage resulting from negligence. You will also need to consider business interruption insurance in the event that your B&B cannot operate for a period of time. If you serve or offer liquor on the premises, you will want liquor liability coverage. If you operate a restaurant or gift shop on your premises you will want appropriate coverage for those activities. Likewise, if you provide a venue for weddings or other special events, or if you offer recreational facilities (boating, fishing, horseback riding, etc.), you will need appropriate event, products or completed operations coverage. Many B&Bs are entirely owner operated, but if you have employees you will need workers' compensation insurance, and possibly crime and fidelity insurance. 

The list of insurance coverages mentioned above is not meant to be complete or universally applicable. There is no such thing as a typical B&B. Each business is unique. And insurance requirements for each must be considered carefully with an eye on both cost and potential risk. 

As a B&B owner you might want to consider contacting a knowledgable independent insurance agent to help you think through your insurance requirements. There are a number of reasons for this. First, as we have discussed, B&Bs are unique, and you need to carefully consider what coverages are appropriate for your particular B&B. Second, many insurers are reluctant to take on B&Bs because of their unique risk profiles and you may need some assistance in locating those insurance companies that are familiar with B&B requirements and are best able to meet them. Third, while cost will be an important factor in your choice of an insurance company and program, you will also need to compare coverages offered by different insurers -- limits of liability, deductibles, exclusions and other policy terms -- so that you are comparing apples to apples. And fourth, you need to assess the financial strength of your insurer so that you can be comfortable that your legitimate claims will be paid. An independent insurance agent, such as Pfeifer Insurance Brokers, can help you with each of these areas. 

Finally, one quick reminder that we are talking about California B&Bs here. That means that there are some risks that are especially pronounced. Many California B&B's are located in forested or woodland areas where wildfires are a risk, others are in earthquakes zones, and still many others are along the coast or in river areas where flooding is a danger. These are not theoretical risks. B&Bs have been among the many casualties of California's recent wildfires and earthquakes, and still others have suffered from flood damage. 

If you are about to embark on a venture as a California B&B owner (or if you are simply reassessing your present business), my best wishes on your new and exciting enterprise. And if you need some assistance in addressing your insurance requirements, please consider contacting Pfeifer Insurance Brokers. 

Alex Pfeifer
Pfeifer Insurance Brokers
650 762-8087
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