庵 most often names a Buddhist convent for nuns (a 尼姑庵 nígū ān), as opposed to a 寺 sì monastery for monks. The older sense is a small round thatched hut, which is why hermit retreats are also called 庵.
The lean-to shelter radical 广 caps the character with a roof and one wall, marking 庵 as a kind of building. It indexes it alongside other dwellings like 店 shop and 府 residence.
Inside sits 奄, supplying the sound that shifted to ān. Its own sense 'to cover over' faintly reinforces the image of a small enclosed hut sheltering a hermit or nun.
