Accommodation Industry

What types of insurance cover should you consider if you run a bed & breakfast, boarding house, hotel or motel, caravan park, or guest house?

All small businesses should have basic insurance policies covering:

  • Fire - provides coverage against building, contents (eg, cash registers) and stock losses;
  • Theft - protects your business against losses arising from theft (including armed robberies);

  • Glass and signs – as it suggests, this policy protects against damage to glass, signs and countertops. (Note: natural wear and tear is not normally covered under this policy); and

  • Public liability – protects you and your business in the event that you are found liable for causing loss, injury and/or damage to a third party (ie the public).

You may also need Workcover (which protects workers who are injured whilst at work and facilitates their rehabilitation) depending on the size of your operation and your state. Contact Workcover authority in your state for further details.

What are the most important types of cover for the accommodation industry?

In addition to the four basic policies, you should consider the following policies:

  • Employee theft – protect you against loss resulting from employee theft;
  • Machinery breakdown – protects you against machinery breakdowns;
  • Stock deterioration – protects you if, for example, a refrigerated unit breaks down, and stock is spoilt, resulting in financial loss; and
  • Goods in transit - provides protection against losses relating to goods (those you either buy or sell) whilst in transit.

Not all of these will be relevant to your specific operation, but it is worth considering if they are, just in case.

Where can you get the right insurance?

Most of the large insurance companies have a range of Insurance policies applicable to small business.

It is also worth contacting commerce or representative groups within the accommodation industry, such as the Australian Hotels Association (AHA), as they may have relationships with insurance companies. For example, the NSW brach of the AHA list a number of recommended insurance providers on their website. Some industry groups negotiate special premiums for their members.