Bed and Breakfast Insurance

Running a bed and breakfast is personal. Your property is often your home, your livelihood, and your guests’ home away from home, all at once. The John Bailey Company specializes in insurance for B&B owners, helping you protect every part of your business with coverage designed specifically for the hospitality industry.

Since 1946, we have been a family-owned insurance agency based in Knoxville, Tennessee. We currently insure hospitality and recreation businesses in 20+ states. We understand the unique risks that come with welcoming guests into your property, and we know how to protect you from them.

Bed and Breakfast Operations We Insure:

• Traditional bed and breakfast inns (4 to 12 guest rooms)
• Historic home B&Bs and heritage properties
• Country inns and boutique lodging
• Farm stays and agritourism bed and breakfasts
• B&Bs offering on-site activities (fishing, hiking, horseback riding)
• Properties with event hosting or wedding venues
• Seasonal and year-round operations
• Owner-occupied and manager-operated properties

Why Your Homeowners Policy Won’t Protect Your B&B

A standard homeowners insurance policy excludes commercial activity on your property. The moment you accept payment from a guest, your homeowners coverage can no longer be relied upon. If a guest slips on your stairs and breaks an ankle, or gets sick from breakfast, a homeowners policy will likely deny the claim, leaving you personally liable for medical costs, legal fees, and potential settlements.

Bed and breakfast operations require a commercial insurance package built for hospitality. This ensures you’re covered for guest injuries, food service liability, property damage to your furnishings and structure, and lost income if you’re forced to close temporarily.

What Does Bed and Breakfast Insurance Cover?

A comprehensive B&B insurance policy from the John Bailey Company can be customized to include the following coverages:

Standard Insurance Options Available:

• General Liability: Covers guest injuries on your property, such as slips, falls, or other accidents, as well as third-party property damage claims
• Commercial Property Insurance: Protects the physical structure of your B&B, furnishings, equipment, and personal property from fire, theft, storms, and vandalism
• Business Interruption / Loss of Income: Replaces lost revenue and covers ongoing expenses like mortgage payments, utilities, and payroll if a covered event forces you to close
• Food-Related Liability: Covers claims arising from foodborne illness or allergic reactions experienced by guests
• Workers’ Compensation: Required in most states for B&Bs with employees; covers medical costs, lost wages, and legal defense for work-related injuries or illness
• Umbrella / Excess Liability: Provides additional liability coverage beyond primary policy limits, often up to $2 million or more

Special Coverages Offered:

• Liquor Liability: Essential if you serve wine, beer, or cocktails to guests, even complimentary
• Innkeeper’s Liability: Covers loss or damage to guests’ personal property while on your premises
• Cyber Liability: Protects against data breaches involving guest credit card information and online reservation systems
• Equipment Breakdown: Covers commercial kitchen appliances, HVAC systems, and other mechanical equipment
• Hired & Non-Owned Auto: Covers liability when using personal vehicles or rentals for B&B business, such as guest shuttles or supply runs
• Event Liability: Additional coverage for B&Bs that host weddings, retreats, or private events
• Historic Property Endorsements: Specialized coverage for older or historically significant structures with unique rebuilding costs

Our Process

Our process is simple. Here is how we work:

1) We Learn About Your Business

First, we discuss your bed and breakfast operation and craft a risk management solution tailored to your needs.

The following includes a few of the standard questions we typically ask during your initial consultation:

• How many guest rooms do you have, and what is your maximum occupancy?
• Is the property your primary residence, or is it manager-operated?
• Do you serve meals or alcohol to guests?
• Is the property a historic building or a newer construction?
• Do you offer any on-site activities or excursions (hiking, fishing, tours)?
• Do you host events such as weddings, retreats, or corporate gatherings?
• How many employees or contractors do you have?
• Do you use an online booking system that collects guest payment information?
• Have you filed insurance claims in the past? If so, what risk management practices have you put in place to prevent future incidents?
• Are there any seasonal factors that affect your operations?

2) We Shop the Insurance Companies

After learning more about your insurance needs, we shop the insurance companies for you and then present a menu of recommended plans for your review.

Once you pick the coverage options that align with your risk appetite, our team can deliver a certificate of insurance to you quickly to ensure your business is protected.

Bed and Breakfast Regulations in Tennessee

Operating a bed and breakfast in Tennessee comes with specific regulatory requirements. Under the Bed and Breakfast Establishment Inspection Act of 1990, any B&B with four or more guest rooms must obtain a permit from the Tennessee Department of Health. These properties are inspected at least twice per year to ensure compliance with state health, sanitation, and safety standards.

Smaller operations, referred to as “homestays,” with fewer than four guest rooms located in a structure of historical significance may be exempt from these permit requirements. However, they are still subject to regulation by the state fire marshal and must meet applicable building safety standards.

Tennessee also requires B&B operators to collect the state sales tax (7%) plus applicable local sales taxes on guest stays. If your gross receipts exceed $10,000 in a city or county, you must also register for Tennessee business tax. Insurance carriers often require proof of regulatory compliance, so maintaining your permits and tax registrations is important not just for legal reasons; it can also affect your ability to file a claim.

Frequently Asked Questions About B&B Insurance