Many bed & breakfast owners are not aware of the difference between the two major commercial insurance coverage forms; special form (all-risk or exclusion based) and basic or broad form (named perils).
The foundation of every bed & breakfast insurance contract is the coverage form, what is actually covered?
Named Perils: With a named perils coverage form, the insurance contract will ‘name’ or list what is covered. There are two types: basic and broad.
Basic names 11 coverages – fire, lightning, explosion, windstorm or hail, smoke, aircraft or vehicle collision, riot or civil commotion, vandalism, sprinkler leakage, sinkhole collapse, or volcanic action.
Broad names everything basic does but adds 4 more coverages – falling objects, weight of snow/ice/sleet, water damage in the form of leakage, and collapse from specified causes.
If your bed and breakfast has a peril and you file an insurance claim, for anything not named above, there would be no coverage. Most owners feel this is a comprehensive list, but the reality is it can be misleading.