As mentioned in a previous article, a new regulatory framework was presented to the Cabinet last October, which includes operational specifications for safety, quality, and sustainability (you can read more about the Airbnb operational specifications here.
Among the key requirements for operating a property through short-term rentals is liability insurance. However, let’s clarify what exactly liability is.
About liability
Liability Insurance refers to legal coverage for compensating material damages or bodily injury caused by negligence toward a third party.
Specifically, Airbnb liability insurance is a supplementary coverage automatically provided to hosts, protecting them from legal and financial consequences that may arise due to injuries, theft, or damages related to guests’ stays at their property.
What liability insurance covers
Liability insurance, also known as short-term rental insurance or Airbnb guest insurance, covers the host in the following cases:
Bodily injuries to guests on the property. If a guest is injured during their stay, such as falling down the stairs, liability insurance covers medical expenses and any potential compensation.
Damage and/or theft of property belonging to a guest. If a guest takes legal action for an incident that occurred during their stay, such as damage or theft of their personal belongings, liability insurance covers part or all of the host’s legal expenses.
Damage caused by a guest to common areas and neighbouring properties. Liability insurance protects you in case guests cause damage to neighbouring properties or common areas, such as fires or floods, due to negligence (but not intentional wrongdoing).
What liability insurance does not cover
Liability insurance does not protect the property host in the following cases:
Damage caused to the property itself by guests. Damages caused by guests to either the accommodation space or to personal items within it are not covered by liability insurance.
For suchcases, such as compensation for damages, additional cleaning services due to accidents involving pets, or damages caused by guests to parked cars, there is host damage protection (Airbnb Host Guarantee).
Damage or injury resulting from intentional acts. Damages arising from malicious actions or violations of laws, such as arson, are not covered by liability insurance.
Why liability insurance is necessary
Protection from unforeseen events. Accidents are inevitable in any space, whether residential or commercial. With liability insurance, you gain financial security to cope with any unexpected events.
Reduction of legal liability. In the event of legal claims, insurance covers defence costs as well as any compensations. Liability insurance falls under Airbnb’s broader legal protection framework, aiming to cover a significant portion of potential or unexpected incidents.
Enhancement of your property’s reputation. As mentioned in previous articles, compliance with safety standards and having insurance indicates professionalism and inspires confidence in guests.
How you can benefit from Airbnb’s liability insurance
- Start by updating your property information. Ensure that all details about your accommodation are accurately recorded on the short-term rental platform.
- Prepare your property space. Install smoke detectors, fire extinguishers, and other essential safety equipment according to the new operational specifications.
- Keep records of maintenance and upgrades you make to your space. This way, you have immediate access to information and can inform any interested parties about the actions taken and the dates they were completed, whether for the energy upgrade of your property or for general compliance with regulations.
In conclusion, it is clear that Airbnb liability insurance will be an integral part of successful hosting. It protects and simultaneously provides financial coverage to hosts against unforeseen risks, allowing guests to enjoy an enhanced stay experience with added peace of mind.
However, it is important to consider the need for additional private insurance, as from 2025 it will be mandatory for property owners to have liability insurance for their properties according to the new regulatory framework.
With proper preparation and management, you can provide a safe and memorable hosting experience for all your guests, ensuring the best outcomes and higher ratings.
On the Airbnb platform, you can complete the liability insurance form, and a representative will contact you to guide you further. However, if you prefer to choose professionals to ensure everything is done correctly, you can feel secure in selecting Sparrow for the management of your property.
