Hotel & B&B insurance

A steady guide to protecting your rooms and revenue

In simple terms, hotel and B&B insurance helps safeguard your property, guests, staff and income when things go wrong. It combines buildings and contents cover with public liability, employer’s liability if you have staff, and business interruption to support cashflow if an insured event stops you trading. For smaller operators, policies can be tailored to a handful of rooms, unusual buildings, and seasonal trading patterns.

In 2025, many UK hotels have seen slight premium relief, but rising wage, material and transport costs are pushing up repair bills and lengthening downtime. That means the cost of being closed can hit harder, even when premiums look stable. For B&Bs, cover often includes paying and non-paying guests, plus out-of-hours help and legal support if disputes arise. At the same time, underinsurance has become a real concern across commercial property as rebuild costs climb. If your sums insured are set too low, any claim payout may be reduced in line with the shortfall.

This guide explains how the cover works, typical limits and exclusions, and the practical steps that reduce risk and help claims go smoothly. Our aim is to give you the clarity to choose the right level of protection, keep documents in order, and budget realistically for the pressures the UK hospitality sector is facing, from staffing shortages to new safety requirements and cyber threats linked to online bookings.

Insurance can protect the balance sheet - good risk management keeps your doors open.

What is covered in practice and how claims usually run

A combined policy typically includes buildings and contents, guest effects, public liability for guest injury or property damage, employer’s liability if you have staff, and business interruption that replaces lost gross profit or revenue after insured damage. For B&Bs, cover commonly extends to both paying and non-paying guests, which can help if friends or family stay and an incident occurs. Many policies add loss of rent or bookings if rooms cannot be occupied following an insured event.

Where claims apply, insurers will look for evidence: inventories, maintenance records, PAT testing logs, fire and security checks, and proof of bookings and income. For example, a burst pipe that closes three rooms may trigger buildings, contents and business interruption cover. You would need repair invoices, prior pricing or booking data, and mitigation steps such as temporary drying or alternative accommodation arrangements. If a guest trips on a loose stair carpet, public liability may respond to compensation and legal costs, provided you can demonstrate reasonable maintenance.

Expect exclusions for gradual wear and tear, poor maintenance, existing defects, and losses beyond specified limits. Business interruption usually has an indemnity period - often 12 to 24 months - that must be long enough to cover realistic rebuild times. Cyber incidents, food safety claims and extended utility outages may require specific extensions. Always check whether outbuildings, coastal weather risks, or specialist features like thatched roofs are included or need separate terms.

Who benefits most from this cover

This insurance suits independent hotels, guest houses and B&Bs of all sizes, including properties with up to six rooms or character features such as coastal homes and barn conversions. It is especially valuable where guest volumes are steady or growing, as rising occupancy increases exposure to slips, trips and accidental damage. Operators in areas with strong B&B demand, such as Blackpool and the South West, can benefit from tailored liability and income protection.

If you own the building or have invested heavily in fit-out, buildings and contents cover matters. If you rely on seasonal bookings, business interruption can smooth cashflow after a fire, flood or major leak. However, if you let a single room occasionally, already have robust landlord cover, or your lender does not require buildings insurance, a reduced level of cover might suffice. The key is matching your policy to actual risks and avoiding gaps that could derail recovery after a loss.

Picking your protection levels

1. Essential
   • Buildings and contents with core perils, public liability at a basic limit, and employer’s liability if applicable. Suits very small B&Bs or start-ups prioritising affordability. Limited add-ons, shorter indemnity period for business interruption.
2. Standard
   • Broader perils for buildings and contents, higher public liability limits, guest effects, and business interruption with a 12 to 24 month indemnity period. Often includes loss of rent or bookings and legal expenses. Suitable for most small hotels and B&Bs.
3. Enhanced
   • Higher limits across all sections, accidental damage, seasonal stock increases, and wider business interruption triggers. Optional cyber cover for booking systems, equipment breakdown, and deterioration of stock. Good for operators with complex facilities or higher occupancy.
4. Optional add-ons
   • Cyber and data liability for booking platforms and payment tools.
   • Equipment breakdown for boilers, lifts and key plant.
   • Goods in transit for laundry and supplies.
   • Terrorism where required by lenders or leases.
   • Increased public liability limits for events or higher guest footfall.
   • Specified all risks for portable items like tablets or POS devices.

Pro tip: choose an indemnity period that reflects current supply chain delays and contractor availability. Twelve months may not be enough in the present market.

What influences price in the UK market

Indicative ranges vary widely. Small B&Bs may pay from tens of pounds monthly, while larger hotels can be significantly higher. Treat figures as guides only and focus on accurate valuations and suitable limits.

Who is eligible and what insurers may ask for

Most UK hotels, guest houses and B&Bs can apply, including mixed-use properties with an owner’s residence. Insurers typically ask for details of construction, year built, roof type, prior claims, security, fire safety measures, electrical and gas safety checks, and the number of rooms and average occupancy. You may be asked for recent accounts or revenue figures to set business interruption sums insured accurately.

Common declinatures include significant non-disclosed claims, substantial unoccupied periods without protections, major electrical or fire safety issues, and properties with serious structural defects. Older buildings are not automatically excluded, but you may need up-to-date surveys, compliance with current fire alarm and emergency lighting standards, and evidence of regular maintenance. Clear, complete disclosure is critical to keep cover valid.

From quote to claim in simple steps

1. Gather property details, safety records and last 12 months’ revenue data.
2. Get quotes based on accurate rebuild and contents valuations.
3. Choose cover limits and an indemnity period that reflects delays.
4. Confirm optional add-ons for cyber, equipment and higher liability.
5. Review exclusions, excesses and conditions before purchasing the policy.
6. Keep maintenance logs and inventories updated throughout the year.
7. If an incident occurs, mitigate loss and notify the insurer promptly.
8. Submit evidence and cooperate with assessors to progress settlement.

Balanced view of benefits and pitfalls

Checks that prevent unwelcome surprises

Before buying, read the schedule and policy wording carefully. Note the sums insured for buildings, contents and stock, and how business interruption is calculated. Confirm the indemnity period and any waiting periods for utilities or infectious disease extensions. Review excesses for escape of water or flood, which can be higher in certain locations. Ensure security and fire protection requirements are achievable and already in place, including alarm testing and staff training. For older buildings, verify any conditions about wiring, heating systems or thatched roofs. Keep documentation that proves valuations, maintenance, and revenue forecasts so claims can be evidenced quickly.

Related covers that may fit better in some cases

1. Commercial property insurance only - suitable if premises are unoccupied or not guest-facing.
2. Landlord insurance with guest extensions - for occasional room lets rather than a trading B&B.
3. Cyber insurance standalone - if online bookings and payment data are the main concern.
4. Event liability insurance - for one-off functions or weddings rather than year-round hospitality.
5. Management liability - for director and officer exposures in larger hotel groups.

Common questions, clear answers

Q: Are premiums really falling in 2025? A: Some hotels have seen slight premium reductions, but higher wages and material costs mean repairs take longer and cost more. Budget carefully for business interruption and accurate sums insured.

Q: What does a typical B&B policy include? A: Buildings and contents, public and employer’s liability, guest effects, and business interruption. Many policies include loss of bookings and legal expenses, with optional cyber and equipment breakdown.

Q: How do I avoid underinsurance? A: Use a professional rebuild valuation, include demolition and professional fees, and review sums insured annually. Extend the indemnity period to reflect realistic repair timelines and supply chain delays.

Q: Do I need cyber cover for a small B&B? A: If you accept online bookings or hold guest data, cyber cover can help with data breaches, system restoration and liability. Limits can be modest and tailored to smaller operators.

Q: Is public liability essential? A: Yes. It covers injury or property damage claims from guests and visitors. Older buildings with stairs or uneven surfaces face higher slip and trip risks, so adequate limits are important.

Q: How do current UK market pressures affect insurance? A: Hotels face rising payroll and inflationary pressures. London properties have seen revenue strain alongside higher wage costs, which can influence risk appetite, repair durations and business interruption needs.

Ready to compare safely

If you decide to get quotes, gather accurate property details and recent financials first. Compare limits, indemnity periods, exclusions and excesses side by side. Choose the policy that reflects current rebuild costs and realistic downtime, not the cheapest sticker price.

Important note

This guide provides general information, not personal financial advice. Policy terms vary by insurer. Always read the full policy wording and schedule, and consider professional valuations to set suitable sums insured and indemnity periods.