Quick Answer: Bed and breakfast insurance covers a home that takes paying guests: the building, the furnishings, liability for guest injuries and the food you serve, and the income lost if a fire closes the rooms. A homeowners policy is not built for that. In Illinois the Bed and Breakfast Act covers operator-occupied homes with no more than 5 guest rooms and requires proof of adequate liability insurance, as the local licensing agency requires.
What Bed and Breakfast Insurance Covers
Property
Covers the house, guest room furnishings, linens, and kitchen equipment against fire, wind, theft, and vandalism. Antiques and art may need to be listed separately.
General Liability
Helps address claims that a guest was hurt or had property damaged: a fall on the stairs, a burn at breakfast, or an illness traced to food you served.
Business Income
Replaces lost room revenue and helps pay continuing expenses while the house is closed for repairs after a covered loss.
Liquor Liability
If you sell wine or beer, or include it in the price of a stay, you may need liquor liability. Tell us how alcohol is served and we check the wording.
Workers Compensation
Pays for medical care and part of lost wages when a housekeeper, cook, or groundskeeper you employ is hurt on the job.
Commercial Umbrella
Adds liability limits above the underlying policies once those limits are used up.
Hosting weddings or parties? See event and wedding insurance. Renting the whole house without living there? That is a short-term rental, and it is insured differently. Some carriers package the core coverages in a business owners policy.
Four Things to Check Before You Buy Bed and Breakfast Insurance
A bed and breakfast is a home and a business under one roof, and most claim problems come from a policy that sees only one of them. These are the four points we check on every account.
Your homeowners policy. The Insurance Information Institute notes that a typical homeowners policy provides only $2,500 of coverage for business equipment, and it points home-based businesses to an endorsement, an in-home business policy, or a business owners policy. Tell your home insurer about the guests before a claim does.
Where the home ends and the business begins. Your own furniture and belongings and the guest rooms' furnishings may sit under different parts of the policy, with different limits. Walk through the house with us so each room lands in the right place.
Lost income. Ask what replaces the room revenue if a fire closes the house for months. Business income coverage is built for that, and it has a waiting period and a limit you should know before a loss.
Events and extras. Weddings, cooking classes, tastings, bicycles, hot tubs, ponds, and animals are often excluded or limited unless the policy names them. List everything guests can do on the property.
Put the guests on the record
A claim is the wrong time for an insurer to learn that the house takes paying guests. A business the insurer was never told about can lead to a denied claim or a cancelled policy. We place the coverage so the guests are disclosed from day one.
The Illinois Bed and Breakfast Act
Illinois has a state law for bed and breakfasts. Cities and counties do the licensing and inspecting under it.
| Requirement | What the rule says | Source |
|---|---|---|
| What counts 50 ILCS 820/2 |
An operator-occupied residence with no more than 5 guest rooms for rent, in operation more than 10 nights in a 12 month period. The operator must live in the house or on contiguous property. Motels, hotels, and boarding houses are not included. | Illinois Bed and Breakfast Act |
| Liability insurance 50 ILCS 820/7 |
The establishment must provide proof of adequate liability insurance as required by the licensing agency. | Illinois Bed and Breakfast Act |
| Licensing 50 ILCS 820/3 |
Municipalities, and counties in unincorporated areas, provide for licensing and inspection, with health and fire departments acting as their agents. | Illinois Bed and Breakfast Act |
| Fire safety 50 ILCS 820/6 |
A fire extinguisher on each floor, a smoke detector in each guest room, no cooking facilities and no portable heaters in guest rooms, and a floor plan filed with the local fire department. | Illinois Bed and Breakfast Act |
| Hotel taxes 50 ILCS 820/8 |
The establishment must comply with Department of Revenue requirements, including any applicable hotel taxes. | Illinois Bed and Breakfast Act |
| Employees | Illinois requires employers to insure almost everyone they hire. An employer that knowingly fails to insure can be fined up to $500 for every day without coverage, with a minimum fine of $10,000. | Illinois Workers' Compensation Commission |
This is a summary for insurance planning, not legal advice. Your city or county sets the license terms and the liability insurance it wants to see, so ask the licensing office before you buy.
More than five guest rooms? Then the Act's definition no longer fits, and the property is usually insured as a small hotel or inn. See our hotel insurance page. Outside Illinois, tell us the state and we check its rules.
What Bed and Breakfast Insurance Costs
No one price fits a bed and breakfast, and we have not found a published benchmark we would put our name beside. These eight things set your number.
| Cost factor | How it moves the premium | What to have ready |
|---|---|---|
| Guest rooms | Carriers set a room limit for each program. | Number of guest rooms and nights open a year |
| The house | Age, construction, wiring, heating, and roof drive the property premium. | Year built and the year each was last updated |
| Rebuilding cost | A historic or custom home can cost more to rebuild than its market value suggests. | A replacement cost estimate, if you have one |
| Food and alcohol | Full breakfasts, other meals, and alcohol each add liability exposure. | What you serve, and whether alcohol is sold or included |
| Events | Weddings and parties change the class of business. | Number and size of events in a year |
| Extras | Pools, hot tubs, ponds, animals, and bicycles are rated or excluded one by one. | Everything guests can use |
| Fire protection | Smoke detectors, extinguishers, and the distance to a hydrant and a fire station move the rate. | Your last local fire inspection, if you have one |
| Claims history | Past losses move the price and which carriers will quote. | Claims for the last five years |
Still living under a home policy? Compare it with what a home insurance policy is written to do.
What we need for a bed and breakfast insurance quote
Underwriters ask for the same items on every account. Having them ready gets your quote back sooner, and a complete submission is easier to place.
- Address, year built, and construction
- The years the roof, wiring, plumbing, and heating were last updated
- Number of guest rooms and nights open a year
- Annual revenue from rooms, food, and events
- Whether you live in the house or on adjoining property
- What you serve: breakfast only, other meals, alcohol
- Events hosted in a year, and their size
- Pool, hot tub, pond, animals, bicycles, or other extras
- Employees and payroll, if any
- Your city or county license and the insurance it asks for
- Your current home and business policies
What Our Clients Say
Why Innkeepers Choose Pro Insurance Group
An Agency, Not a Carrier
We are an independent agency. We work for the innkeeper and shop the market on your behalf.
Home and Business Together
We place the coverage so the house, your own belongings, and the guest side are each accounted for.
License Ready
Tell us what your city or county asks for. We issue the proof of insurance to match.
We Ask About the Extras
Events, alcohol, hot tubs, and animals are where coverage gaps hide. We raise them before you buy.
Related pages: hotel insurance, motel insurance, short-term rental insurance, and event and wedding insurance.
Bed and Breakfast Insurance FAQ
What insurance does a bed and breakfast need?
Most bed and breakfasts carry property coverage for the house and furnishings, general liability, and business income. Workers compensation is added when there are employees, liquor liability when alcohol is sold or included, and an umbrella for higher limits. Some carriers package the core coverages in a business owners policy.
Does homeowners insurance cover a bed and breakfast?
Do not count on it. A homeowners policy is written for a residence, and the Insurance Information Institute notes that a typical one provides only $2,500 of coverage for business equipment. Tell your insurer about the guests and ask in writing what is covered. A business policy or a program written for bed and breakfasts is the usual answer.
How much does bed and breakfast insurance cost?
There is no standard price. The premium depends on the house's age and rebuilding cost, the number of guest rooms, what you serve, whether you host events, extras such as a pool or hot tub, and your claims history. A producer confirms the exact premium during quoting.
Does Illinois require insurance for a bed and breakfast?
Yes, for liability. The Illinois Bed and Breakfast Act requires an establishment to provide proof of adequate liability insurance as required by the licensing agency. Ask your city or county licensing office what it wants to see. Illinois also requires workers compensation for almost everyone you hire.
What counts as a bed and breakfast in Illinois?
Under the Bed and Breakfast Act, it is an operator-occupied residence with no more than 5 guest rooms for rent, in operation more than 10 nights in a 12 month period. The operator must live in the house or on contiguous property. Motels, hotels, and boarding houses are not included.
Is a bed and breakfast insured like a short-term rental?
No. A bed and breakfast is an owner-occupied business that serves food and takes guests through the year. A short-term rental is usually a home or unit rented without the owner present. They are underwritten differently, and a policy for one may not fit the other.
Does bed and breakfast insurance cover weddings and events?
Not automatically. Many policies limit or exclude events unless they are disclosed and rated. Tell us how many events you host and how large they are. Couples and planners can also buy their own event policy, and you can ask to be named on it.
Do I need liquor liability if I only serve complimentary wine?
It depends on the policy and on whether the wine is truly free or part of what guests pay for. Tell us exactly how alcohol is served. We check the liquor wording in the liability policy and add liquor liability where it is needed.
Is Pro Insurance Group an insurance company?
No. Pro Insurance Group is an independent insurance agency, not an insurance carrier. We work for the innkeeper, take the account to the carriers that write bed and breakfasts, and place the policy with the company that fits. We are based in Elgin and Huntley, Illinois, and write business in 40+ states.
Get Your Bed and Breakfast Insurance Quote
A few quick questions and nothing to upload. A licensed producer takes your account to the carriers that write bed and breakfasts and replies within one business day.
Get My Quote Call 833-776-4671
Reviewed by Neal Fusco, VP Commercial Lines
25 years in insurance, including 16 at Zurich North America in workers' compensation managed care and claims.
Illinois licensed insurance producer #18515626. Figures verified October 2026.