Buying insurance is a complicated process. It’s important to have the right coverage as it concerns two of your largest assets: your home and your business. We try to simplify the process and help you avoid insurance pitfalls by sharing answers to some of the most common innkeeper insurance questions: How much insurance should I purchase on my buildings?What is coinsurance?What is functional replacement cost coverage?How much insurance should I purchase on my contents?How much Loss of Income and Extra Expense coverage do I need?Do I need a homeowners or commercial policy?Why should I select the CBIZ Innkeepers Insurance Program?What insurance company do you work with?Is this supplemental insurance?If I reside at my inn, does the CBIZ Innkeepers Insurance Program policy cover me?Are the amenities and other activities offered at my property covered?Why would I need liquor coverage?How are antiques replaced in the event of a loss?
How much insurance should I purchase on my building?
In most cases you want to insure your inn for the amount it would cost to rebuild. The rebuild value is usually higher than the resale value. Most commercial insurance policies contain a coinsurance clause and if you underinsure, you will be subject to a coinsurance penalty at the time of loss. See “Coinsurance: How it Impacts Your Coverage and Reimbursement” for more information.
The CBIZ policy insures your building on a guaranteed replacement cost basis, meaning the cost to rebuild the building at the time of loss will be paid. We are the only program offering guaranteed replacement cost coverage.
Another option is our functional replacement cost coverage, which allows you to insure your building at a price you determine. Please see “ What is functional replacement cost coverage?” below for a detailed explanation.
What is coinsurance?
The coinsurance clause in standard commercial insurance policies requires that you insure a specific percentage of the rebuild value of the buildings. If you insure less, you will suffer a penalty in the event of a partial loss, which means you will not be fully reimbursed. you will be a "co-insurer" along with the insurance company.
The CBIZ Innkeepers Insurance Program does not include the coinsurance clause.
What is functional replacement cost coverage?
A building limit is chosen based on "functional replacement cost," that is, the amount it would cost to repair or replace using materials that are functionally equivalent to obsolete, antique, or custom methods and materials. A functional replacement cost limit is generally lower than a replacement cost limit, resulting in lower premiums. No coinsurance applies.
The CBIZ Innkeepers Insurance Program functional replacement cost coverage includes the guarantee that your building will be rebuilt in the same architectural style.
What is guaranteed replacement cost coverage?
Replacement cost coverage on the building with a guarantee to replace the building, even if the damage exceeds the limit on the policy. No coinsurance applies.
How much insurance should I purchase on my contents?
Your contents limit should be based on what it would cost to replace all of your contents.
How much Loss of Income and Extra Expense coverage do I need?
You'll need to calculate this by answering these questions, perhaps with the help of your accountant:
- What is your net income (profit) and total operating expenses for the last 12 months and the estimated next 12 months following the policy’s inception?
- In a worst case scenario, how long would you be out of business following a loss?
- Amount of Extra Expenses needed to maintain operations or to reduce the period of shut down.
- Consider availability of materials, labor, climate, weather conditions, etc.
Most loss of income coverage ends 12 months after the loss, regardless of whether the inn is ready to receive guests.
The CBIZ Innkeepers Insurance policy has not time limitation, no deductible, and no monthly limitation. It pays until the end of the period of restoration or until the business income limit you chose has been reached.
See “ Innkeeper Protection for Loss of Income” for additional information.
Do I need a homeowners or commercial policy?
You may need both if you reside at the inn. The limitations to each are explained below.
A homeowner’s policy is designed to cover a residence, not a business. In fact, homeowner’s policies specifically exclude business related activities. You would not have liability coverage if a guest were injured at your establishment. Additionally, there is no loss of business income in a homeowner’s policy.
A commercial policy provides liability for business activities but not personal activities if you reside at the business. You and your family would not be protected should you be sued for your actions, whether on or off the property.
Loss of use coverage is not included in a commercial policy. Loss of use pays expenses for you and your family to live somewhere else while the building is being repaired after an insured loss.
The CBIZ Innkeepers Insurance Program provides one policy to cover your business and personal needs.
Why should I select the CBIZ Innkeepers Insurance Program?
We developed the first insurance policy for inns, bed & breakfasts, resorts and boutique hotels. We understand your needs and our knowledgeable staff focuses solely on your industry.
The coverage that truly sets our program apart includes:
- The only program offering guaranteed replacement cost coverage on buildings
- No coinsurance on buildings or contents
- Covers both business and personal insurance needs
- Loss of income has no time limitation, no deductible, and no monthly limitation
- No depreciation on antiques
- Includes liability coverage for most amenities and activities you may offer
In addition, our program is endorsed by numerous local, state and national inn associations.
What insurance company do you work with?
Our policy is underwritten by Western World/Tudor Insurance, an A.M. Best Rated A XV carrier. Western World is part of the Validus Group, a leading global provider of insurance. This policy is available exclusively through CBIZ.
The A.M. Best rating signifies that Tudor has an excellent ability to meet its ongoing insurance obligations, including paying claims. A.M. Best ratings are recognized worldwide as the benchmark for assessing insurers’ financial strength.
Is this supplemental insurance?
No. The CBIZ Innkeepers Insurance Program is a comprehensive policy designed for innkeepers.
If I reside at my inn, does the CBIZ Innkeepers Insurance Program policy cover me?
Yes. Our policy is tailored to provide both personal and business protection.
Are the amenities and other activities offered at my property covered?
Yes, in most instances. The policy includes commercial liability coverage for amenities and many other activities. Please see the Liability Coverage page for a complete list.
Why would I need liquor coverage?
If you sell or serve liquor, you need liquor liability insurance. You may also need a liquor license. Please note that Host Liquor does not cover you. Host Liquor coverage only insures an occasional “party” situation hosted by the business.
How are antiques replaced in the event of a loss?
Our policy insures antiques without depreciation. This is one of the unique advantages of the CBIZ program. The replacement cost value of your antiques must be included when choosing a contents limit. Antiques that are truly one-of-a-kind should be appraised and scheduled on your policy.