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Damage Policies


Policy Wording Around Theft or Damage by Guests


It is prudent practice for all B&B owners to have specialist property insurance in place for the property itself and its contents. The risks covered by the insurance would include, among other things, theft of possessions and damage to the owner’s property and contents caused by guests. Insurance should also cover the liability risks associated with running a B&B, including statutory liability and public liability.  In the event that a claim to insurers arising for damage caused by guests is made, it is probable that insurance cover will only cover the costs above the amount of the policy excess. That amount will vary depending upon a variety of factors including the nature of the business, the risks in question, claims history etc. and could be quite substantial.

Therefore B&B owners should absolutely protect their ability to be able to pursue a claim for property damage against guests by putting them on 'contractual notice' of the nature and extent of their potential liability before or at the time of them making a booking.

There are a number of ways that this contractual notice can be given. It could appear:

  1. on your website;
  2. in your booking terms and conditions (for both direct bookings through your own website and through the information you provide online booking engines about your property); and
  3. in your in-room compendium.


However you choose to communicate the policy to guests, you must ensure that the notice is clear and visible if you want to maximise your chances of being able to enforce it.

There is no "standard" wording that "must" be used to be effective. But an example of the type of wording you might like to use is as follows:


Guests agree to be held personally liable for any charges incurred during their stay. In the event of a booking for multiple persons, all guests are jointly and severally liable for the charges and the accommodation provider may take payment for charges incurred from the credit card supplied at the time of making the booking.

Damage to Bed & Breakfast property
We reserve the right to charge guests for the cost of rectifying damage which has been caused by the deliberate, negligent or reckless acts of guests to the accommodation and its contents. If such damage is discovered during the stay it will be drawn to the guest’s attention but if discovered after guests have departed then we reserve the right to make a charge to the guest’s credit card, or send an invoice for the costs for payment to the registered address.

As a point of best practice, should any B&B owners be looking to enforce such a policy then, in the event of substantial damage occurring, take (dated) photos before any cleaning, clearing or repairs are carried out.  If the guests have left before damage is discovered then try to call them to put them on notice of the issues and action/costs to rectify. If they do not dispute the damage record the fact in an email. If this is disputed then email them photos and put them on notice of ongoing costs such as of not being able to let a room.

Businesses have a legal duty to mitigate against the amount of (non-trivial) losses to give those responsible an opportunity to respond to the claim before action is taken to rectify damage. Such efforts are likely to be looked upon favourably by the courts rather than large sums being incurred in rectification without prior warning.

If for any reason payment is not forthcoming then an accommodation provider can ultimately claim the costs through the Disputes Tribunal (for claims under $20,000). But there will be time and cost involved with following this course of action.  Further, if the damage was malicious or reckless then this could amount to criminal damage and the Police can be involved. The Police should inspect the damage and then decide if it merits taking formal action against the guests or if the issue of warnings is more appropriate.

This note is only intended as a brief summary only of the main issues and B&B owners should investigate their specific options for protection further, starting with seeking the advice of a specialist Insurance Broker. See our website for further information on insurance and insurance brokers.


Damage Policies

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