Hotel, guest house and B&B insurance
Cover options for hotels, guest houses and B&Bs, including public liability, employers' liability, buildings, guests' property and lost bookings after a fire or flood.
Hotel insurance is a set of business covers built around looking after guests, staff and a building that's open around the clock. Hotels, guest houses and B&Bs usually combine public and products liability, employers' liability, buildings, contents, business interruption and cover for guests' property, with optional cover for equipment breakdown, loss of licence, cyber and terrorism.
PIB Insurance Brokers arranges cover for independent hotels, guest houses, B&Bs and small hotel groups. A broker can be particularly helpful when your risk is more complex, for example a listed building, a bar or restaurant open to non-residents, a spa or pool, weddings and events, or seasonal closure. For smaller, design-led hotels, see our boutique hotel insurance; if your restaurant runs as a business in its own right, our restaurant insurance; and for other types of venue, our hospitality insurance.
What hotel insurance covers
Hotel policies usually combine a core of essential covers with optional extras, depending on your size, what you offer guests and whether you own or lease the building. The summaries below are general examples of what may be covered in each section; your policy schedule and wording decide what is and isn't covered in any claim.
Core covers
Public and products liability
Claims from guests, visitors and diners who are hurt or whose property is damaged, such as a slip on a wet bathroom floor, a fall on the stairs or food poisoning from your restaurant.
Watch for: Claims from your own staff (covered separately), deliberate acts, liability you've taken on by contract beyond what would apply in law.
Employers' liability
Claims from staff hurt or made ill at work, such as back injuries in housekeeping, burns in the kitchen or slips on stairs. Usually required by law if you employ staff, including part-time and seasonal staff. The law requires a limit of at least £5m.
Watch for: Who the policy treats as an employee can vary. Check the policy terms if you use contractors, casual, temporary or seasonal workers.
Buildings
The structure of your hotel, outbuildings and fixed fittings against fire, flood, storm and escape of water. A listed building needs a rebuild cost that reflects specialist materials and methods.
Watch for: A rebuild cost that's out of date, a higher excess for subsidence, restricted cover if the building is empty beyond a stated period.
Contents and equipment
Furniture, beds, linen, televisions, and kitchen and laundry equipment against fire, flood, theft and, often, accidental damage.
Watch for: Wear and tear, gradual deterioration, theft without forced entry.
Business interruption
Lost income from rooms, food and drink, plus ongoing costs such as wages, while you can't trade after an insured event like a fire or flood. Choose a period long enough to rebuild and for bookings to recover. See our business interruption insurance page.
Watch for: Closures caused by something the policy doesn't cover. Closures from disease are usually excluded unless you've added a specific extension.
Guests' property
Guests' belongings that are lost, stolen or damaged while they stay, including items handed in for safe keeping.
Watch for: Limits per item and per guest, and conditions on how valuables are kept.
Optional covers to consider
Equipment breakdown
Sudden mechanical or electrical failure of boilers, lifts, kitchen equipment and refrigeration, including repair costs.
Watch for: Breakdowns caused by lack of servicing, wear and tear, equipment beyond a stated age.
Engineering inspection
Thorough examinations of lifts, boilers and pressure systems that the law requires on a set schedule, for example every six months for passenger lifts.
Note: This is an inspection service, not insurance, and isn't regulated by the FCA.
Loss of licence
Loss in the value of your business if your premises licence for alcohol is suspended or revoked.
Watch for: Breaches you knew about, or licence conditions that weren't followed.
Cyber
Costs of responding to a data breach or cyber attack, such as a compromised booking system, card payments or guest Wi-Fi.
Watch for: Incidents caused by known security flaws left unfixed, fraud by your own staff (usually separate crime cover).
Legal expenses
Legal costs for disputes with staff, suppliers or guests, and some regulatory investigations.
Watch for: Disputes that began before the policy started, claims below the policy excess.
Terrorism
Damage and lost income caused by terrorism, which standard property cover usually excludes.
Watch for: Usually bought as a separate policy; terms depend on location and the sums insured.
Guest house and B&B insurance
Guest houses and B&Bs need much the same covers as hotels, scaled to the number of rooms. If you run a B&B in your own home, the main difference is that home insurance usually doesn't cover paying guests. Tell your home insurer before you take bookings, and check whether your mortgage lender needs to agree.
Some insurers offer a B&B policy that combines your home and the business in one place: the building, your own and your guests' belongings, public liability for guests, and lost bookings after an insured event such as a fire or flood.
What hotel insurance does not cover
Typical limits across hotel and guest house policies:
- Problems that existed before the policy started: known damage and ongoing disputes are usually excluded.
- Wear and tear: furniture, fittings and buildings wearing out over time isn't insurable damage.
- Poor maintenance: damage caused by equipment or systems that weren't serviced or cleaned as required, such as kitchen extraction, may be excluded.
- Closures from disease: policies usually exclude lost income from disease or a pandemic unless you've added a specific extension.
- Underinsurance: if your sums insured are too low, the insurer may reduce a claim in proportion (known as average).
- An excess on most claims: most covers carry an excess (the amount you pay before the insurer contributes), which varies by cover.
Conditions matter too: claims may also be reduced or declined if policy conditions aren't met. Common examples: fire alarms not tested or logged, a fire risk assessment not kept up to date, or security measures not in use when the hotel is closed.
How much does hotel insurance cost?
There is no standard price. What you pay depends on the number of rooms, your turnover, the rebuild cost of the building and whether it's listed, whether non-residents use your bar or restaurant, any spa, pool or gym, the events you host, and your claims history.
What affects the cost
- A clean claims record: insurers usually look at the last three to five years.
- Fire safety: an up-to-date fire risk assessment, tested alarms and cleaned kitchen extraction may lower the cost of property cover.
- Security: alarms, CCTV and controlled access to guest floors may lower the cost of contents and guests' property cover.
- Accurate values: an up-to-date rebuild valuation, especially for an older or listed building, can help reduce the risk of underinsurance or setting the sum insured higher than necessary.
- Your excess: choosing a higher excess (the amount you pay towards each claim) may lower the premium, the price of your cover.
Why work with PIB Insurance Brokers
We explore your options
We can approach insurers that cover hotels and hospitality businesses and set out the differences in cover, not just price.
We look at how you trade
Weddings and events, a bar open to non-residents, a spa or pool, or closing for part of the year may each change what you need to tell your insurer.
We look for common gaps
Business interruption set too short to rebuild and win back bookings, an out-of-date rebuild cost, or guests' property limits below what guests bring.
Here when things change
Our team is on hand throughout the policy year for advice, whether your circumstances change or you're not sure what to do next.
What our clients say
Reviews from PIB Insurance Brokers clients across the sectors we work with, collected by Reviews.io.
Opening, taking over, or not sure your hotel's cover fits?
Get a quoteFrequently asked questions
Do hotels, guest houses and B&Bs need public liability insurance?
It isn't required by law, but you'll usually need it in practice. Landlords often make it a condition of the lease, and event clients may ask to see it. The main insurance required by law is employers' liability, which most businesses need once they employ staff, including part-time and seasonal staff. The minimum is £5m, and you must display the certificate or make it available to staff electronically.
Is a hotel liable for guests' lost or stolen belongings?
It can be. Under the Hotel Proprietors Act 1956, a hotel that displays the notice set out in the Act can limit its liability for guests' property to £50 an item and £100 a guest. The limit doesn't apply if you or your staff were at fault, or if the guest handed the items to you for safe keeping. Guests' property cover pays for claims you're liable for, up to the limits in your policy.