Host-Liability Policies Are Not What You Think and Here’s Why

Whether your vacation rental property is a mountain cottage, a beachfront cabin, or a condo in the midst of a bustling metropolis, you face risks every time you rent it to others.

In addition to the risk of loss you face if a vacationer destroys your furniture or inadvertently creates water damage by leaving a faucet running, you could also be held legally and financially liable if someone is injured on your property.

Some vacation rental listing sites provide host liability coverage for free or at a reduced cost as part of their service offerings for vacation rental property owners. These types of insurance policies are a good start in managing property owners’ risks. However, relying exclusively on host liability policies could leave you, the property owner, without adequate coverage.

Coverage is Limited to the Platform You Used to List Your Property

First, host liability coverage may only be available if your property is rented through the listing site’s platform. If you rent to vacationers outside of those channels and you are the subject of a personal injury claim arising from an off-platform rental, the site’s insurer may deny coverage and responsibility.

Host Liability Policies Come with a Host of Exclusions

Host liability policies generally limit coverage to liability only and exclude coverage for property damage.  So, while a host liability policy may cover you for certain personal and legal liability claims, your structure and personal property may be left unprotected under this type of coverage.

Vacation rental property owners also sometimes mistakenly assume that host liability policies cover them for any type of personal injury claim or legal lawsuit filed against them as a result of rental activities. The reality is that host liability coverage often comes with lists of exclusions you may not even know to look for.

Airbnb provides both a “Host Guarantee” and a “Host Protection” policy to its users as an added benefit of using the platform. The Host Guarantee is designed to cover property damage caused by guests. The Host Protection program provides up to $1 million in primary liability coverage for a guest’s bodily injury or damage to their property. Though this sounds wonderful, Airbnb’s Host Guarantee and Host Protection policy have a major list of exclusions including damage caused by acts of nature, property damage due to pollution or mold, loss of business income and personal/advertising injury.

That being said, always read the fine print of your host liability policy and pay attention to its exclusions. You could be in for an unpleasant surprise if the insurer denies coverage and you find yourself on the hook financially.

You'll Still Need to File Claims with Your Primary Insurer

Finally, this type of insurance coverage may not be considered “primary” coverage. This means that if you have another insurance policy that provides liability protection for vacation rental activity, both the host liability policy and your other insurance coverage could share responsibility for covered claims. So, the host liability policy doesn’t eliminate your need to file a claim with your existing insurer. 

Host Liability Policies Come with a Host of Exclusions

Host liability policies generally limit coverage to liability only and exclude coverage for property damage.  So, while a host liability policy may cover you for certain personal and legal liability claims, your structure and personal property may be left unprotected under this type of coverage.

Host Liability Policy < Vacation Rental Insurance

The bottom line is, claims happen but not all claims may be covered like you’re led to believe. Your vacation rental property is important to you, so don’t rely on a free policy with lots of limitations for protection. Purchasing short-term rental insurance designed specifically for vacation property owners can give you the insurance protection you need, covering both property damage and liability risks. Find out more about how CBIZ Vacation Rental Insurance can protect you from the risks you face when renting your property. Request a free quote today!

This blog may contain scenarios that are provided as examples only. Coverage is subject to the terms, conditions and exclusions of the policy issued. The information provided is general in nature and may be affected by changes in law or the interpretation of such laws. The reader is advised to contact a professional prior to taking any action based upon this information.

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