Protect Your Short-Term Rental: The Power of an LLC

Short-term rentals have become one of the most popular ways for property owners to generate extra income, with Airbnb and VRBO turning spare homes, condos, and cabins into thriving businesses. However, this opportunity comes with added risk. Running a short-term rental introduces liability concerns, unexpected damages, and the potential for costly claims that can put more than just your rental income at stake. That’s why treating your rental property like a business — and protecting it as one — is so important.

One of the smartest steps you can take is establishing a Limited Liability Company (LLC). An LLC not only strengthens your financial safety net but also works hand-in-hand with specialized insurance to safeguard your property, income, and personal assets.

Why Consider an LLC for Your Vacation Rental?

If you’re thinking about turning your Airbnb or Vrbo property into a short-term rental business, forming an LLC is a smart move for protecting your investment. An LLC separates your personal assets from your rental operations, providing a key layer of protection if a guest is injured, your property sustains damage, or a claim arises. Unlike homeowners or landlord insurance policies — or platform guarantees like AirCover — an LLC helps ensure your home, savings, and investments aren’t exposed to costly risks associated with running a short-term rental.

The Benefits of an LLC

For Airbnb hosts and Vrbo owners, establishing an LLC offers valuable advantages — access to more robust insurance coverage, potential tax benefits, and a professional business image that builds guest trust and supports vendor relationships. Managing your property through an LLC can simplify expense tracking and help you avoid confusion if you ever need to file a claim.

The process involves these key steps:

1. Create a business name
2. Process the articles of organization
3. Prepare an operating agreement
4. Acquire an Employer Identification Number (EIN)
5. Establish a dedicated business bank account

Your insurance provider can also offer guidance to ensure your coverage matches your business’s needs as it grows.

Real-World Protection When It Matters Most

Imagine your short-term rental business is thriving, with positive reviews and consistently high occupancy rates. Then, one day, a guest sustains an injury or your property suffers damage, leading to a costly claim. Without an LLC and the right insurance policy from a trusted insurance provider, your personal assets could be vulnerable to legal costs and financial loss.

It is always worthwhile to secure dedicated insurance for your Airbnb. CBIZ offers insurance coverage designed specifically for Airbnb hosts, Vrbo owners, and short-term rental businesses. An LLC paired with tailored insurance coverage can create a comprehensive safety net, enabling you to confidently manage your property and focus on growth, rather than potential liabilities.

Secure Your Success with CBIZ

As your rental business grows, ensure you have protections in place to safeguard what matters most — your property, income, and future. Connect with a CBIZ Vacation Rental Insurance advisor today to explore competitive coverage options and personalized guidance.