Owning and managing a guesthouse or bed and breakfast establishment can be emotionally and financially rewarding. It can be equally emotionally and financially draining if you don’t follow the rules, especially if it is the first time you are venturing into this field.
With South Africa’s abundant natural beauty, its hospitable people, and the wide range of activities offered year-round, it’s no wonder the country is a must-see destination for many foreign visitors. Even local tourists use guesthouses and B&Bs as they offer comfortable, affordable accommodation, many times in the heart of the destination travellers are going to. But managing such an establishment – including renting out apartments on Airbnb – comes with a set of responsibilities every owner should know.
As a guesthouse or B&B owner, you’re in a business and this will change your risk profile with a bank, especially if you are using the same premises you live in as the business. As a property owner it is likely you already have homeowner’s insurance, including personal liability cover. You need to consider that exclusions to this cover may apply if you use your property for a guesthouse or B&B. For this reason, your insurance cover must change from personal to commercial cover, as your personal insurance won’t cover incidents such as visitor’s belongings being stolen, or them damaging your property. There are numerous scenarios where personal insurance just doesn’t meet the needs of a guesthouse or B&B owner, and understanding these shortfalls early is essential before realising them too late.
If you haven’t already done so, carefully check your existing policy now and ensure it meets your needs as a guesthouse or B&B owner. If you need to, speak with your broker and identify any gaps there may be. Take out tailored insurance for your particular needs, whether you own or run a guesthouse or B&B, operate an Airbnb, or rent out rooms in your home. It is important when considering this cover, to choose the best option that covers your and your guests’ belongings and which has liability cover and protection against any business losses.
If you belong to a guesthouse or hospitality association, check if they offer any specialised options for cover (maybe at favourable rates). Airbnb, for example, has built in host protection insurance against liability claims up to a certain amount.
Some important things for you to consider when taking out additional insurance include:
- How does earning money from your home affect your current personal cover?
- Are you complying with the conditions of your current cover?
- If you have a swimming pool on the premises, is access to the area controlled? Failure to control entry to a pool may amount to negligence; it is important that you comply with regulations and by-laws.
- If you are providing basic food such as coffee, tea, milk, rusks or cookies remember that your personal insurance will not cover you if, for instance, one of your guests gets food poisoning.
- If you are using your vehicle to transport guests, there are certain permits you will need and your insurance cover will need revising to accommodate for this part of your service.
Remember it’s your responsibility to protect your guests; if anything goes missing or, worse, there’s an injury, they will look to you for compensation. Assuming you are adequately covered is not good enough and having a specialist policy for your guesthouse or B&B is non-negotiable; simply put, it is a necessity.
