This is one of the most important aspects of guest house insurance, without their insurance policy having the correct liability cover in place the owner opens themselves up having to meet claims from their own finances.
Liability insurance is very important for those who may be held legally liable for the injuries of others, especially relevant to the owners of guest houses.
Public liability cover is very different to personal liability cover, public liability would be covered in a correct Guest House Insurance policy whereas personal cover will not.
Guest house owners may purchase liability insurance that covers them if guests are injured on the guest house premises.
Importantly, it should be remembered that just proving you are liable to a claim could run into hundreds of thousand of rands. This is a cost which, without the correct guest house insurance, is a cost the owner of the guest house will have to bear.
What Does Liability Insurance Mean?
Liability insurance is a type of insurance that protects an individual or business from the risk that they may be sued and held legally liable for something such as injury or negligence.
Typically liability insurance covers both legal costs and any legal payouts for which the insured would be responsible if found legally liable. This is of course subject to policy limits and selected cover levels.
Recommended liability insurance for guest houses:
- Liability insurance cover should apply to the establishment as a commercial undertaking (personal liability policies do not cover any commercial activities)
- If the owner of the establishment provides transport for the guests the liability must extend to include passenger liability cover.
Motor vehicles being used for the transportation of guests should be correctly licensed in terms of the National Land Transport Transition Act No 22 of 2000
- The policy must provide for product liability to include the risk of food and drink poisoning
- The policy limit should be not less than R25m. This figure in view of the value of the rand against foreign currencies and the increasing number of foreign visitors
- Any activities offered by the establishment beyond the normal scope such as hiking and walking trails, use of boats, motorised quad cycles etc. must be disclosed to insurers and confirmation of these activities noted in the policy by endorsement
(BnB Sure Liability Section underwritten by certain underwriters at Lloyds)
In summary if you are unsure whether your insurance policy covers you adequately get it checked by a guest house insurance expert, its simply not worth the risk, even if you take every care somethings are out of your control and could result in significant financial loss.
Incompass would be delighted to discuss your insurance needs and provide you with a free quotation based upon your specific circumstances.