Everything You Should Know About Airbnb Insurance

As an Airbnb host in Canada, you face mountains of risks. But with LiabilityCover, you can gain the insurance policies you need to ensure complete protection from the country’s top insurers.

In the following sections, you’ll discover everything you need to know about Airbnb insurance, so you can keep your business up and running for years to come.

 

Business Insurance for Airbnb Rental Hosts

Suppose you occasionally rent your condo, home, or apartment through platforms like Airbnb, VRBO, and HomeAway. In that case, you must acquire a personalized rental insurance policy plan to protect yourself against unforeseen disasters and third-party liability.

 

What Does Airbnb Insurance Cover?

While all policy packages are different, most comprehensive Airbnb insurance bundles include the following coverages:

 

Commercial General Liability (CGL) Insurance Coverage

Otherwise known as “slip-and-fall” insurance, commercial general liability coverage protects against allegations of third-party property damage and bodily injuries caused by your business. Allegations of defamation, false advertising, libel, and slander are usually included too.

However, it won’t cover:

  • Patent infringement
  • Contractual liability
  • Intentional criminal acts
  • Motor vehicles
  • Professional services or any advice you provide

You should anticipate spending around $450 per year for a standard commercial general liability insurance policy with a limit of $2 million. However, the cost depends on a variety of factors, including:

  • Years of experience — The more experience you have, the lower the likelihood of making mistakes and experiencing lawsuits. If you’ve been a long-standard Airbnb host, you can expect more attractive premiums.
  • Previous claims — A history of consistent business insurance claims shows you’ll likely make another claim in the future, increasing your premium price.
  • Annual and forecasted revenue — If your turnover is high from short-term rentals, third parties will likely request more compensation. Therefore, you should expect to pay more for your commercial general liability insurance policy.

We work with the country’s top providers to guarantee you always get the best CGL deal.

 

Commercial Property Insurance Coverage

Commercial property insurance protects against the physical loss of or damages to your property and its contents due to thefts, vandalism, fires, and other external disasters.

It’s often referred to as commercial building insurance or business property insurance and usually includes coverage for the following areas:

  • Electronics — If you have any electronics inside the dwelling (like TVs), the policy gives you the money to repair or replace them.
  • Building coverage — This clause covers repairing or replacing your property due to unexpected disasters like floods or fires.
  • Equipment, furnishings, and fixtures — It replaces or repairs any equipment, fixtures, and furnishings damaged or stolen during an unexpected event.

Most commercial property policies include coverage for tenant improvements and inventory. But as an Airbnb host, these clauses won’t necessarily apply.

Some policy exclusions include the below:

  • Cash, precious metals, and securities (crime insurance will cover these)
  • Wear and tear of equipment due to standard use
  • Buildings left unoccupied or vacant for more than 30 days
  • The disappearance of items where you can’t explain the cause of loss

 

Loss Assessment Insurance Coverage

As a condominium unit owner, you share responsibilities and ownership with other condo units for the maintenance and care of common areas like green spaces, swimming pools, and fitness centres.

Even though your condominium corporation may have enough coverage, the loss assessment insurance protects you if a claim is made against the corporation equalling more than its policy limit.

 

Rental Income Insurance Coverage

If you lose your rental income due to property damage, this coverage compensates you. However, it’s worth noting that the damage must be caused by an insured peril for the insurance to apply. Typically, fires and floods are listed, but other catastrophes may be available if needed.

 

Cyber Liability Insurance Coverage

When your business systems are hacked or breached, the associated costs can be astronomical. Since you’re home-sharing via Airbnb or a similar platform, guests’ data is stored digitally, making a cyber liability insurance policy vital.

Generally speaking, you should take out this coverage if at least one of the following applies:

  • Your use a point-of-sale system.
  • You store data in cloud or computer systems.
  • You store your guests’ data, including financial information.
  • You provide hardware or software services to people for a fee.

Most cyber liability insurance policies cover the legal costs and damages related to:

  • Responding to the incident and accessing 24/7 cyber incident response hotlines
  • Coordinating an incident response after a cybercrime
  • Managing the crisis and providing credit monitoring services to customers
  • Repairing and restoring the software systems damaged during the attack
  • Losses experienced due to your system outage

You can also choose to add a social engineering rider. It provides coverage if you’re tricked into offering system access or transferring money to a scammer’s bank account. The broker we assign can discuss whether this would be an appropriate addition to your Airbnb insurance package.

 

Contingent Unit Insurance Coverage

If you own a condo unit, contingent unit coverage protects you in situations where the condominium corporation doesn’t have sufficient insurance to cover the occurred peril. Adding this coverage to your policy ensures you don’t have to pay out of pocket in such scenarios.

 

What Protection Can You Get From Airbnb Itself?

Airbnb provides its hosts with two coverage types automatically. They are as follows:

  • Host protection insurance — This insurance covers your legal responsibility for bodily injuries to guests and damage to their property. Depending on the circumstances, it could also cover your legal responsibility for damage to your building’s common areas (for example, swimming pools or shared kitchens). However, it won’t cover injuries or damages caused by a guest’s intentional act, loss of income, or damage to your dwelling.
  • Host guarantee protection — This coverage is essentially property damage protection. It offers coverage for damages to your belongings and building caused by a guest or somebody they invite into your house. However, it’s important to note that it isn’t insurance, and not all damages are covered. It won’t protect against third-party bodily injuries, meaning you’ll need to buy extra coverage for these problems.

 

What Risks Do You Face As an Airbnb Host?

The coverage limit provided by Airbnb might sound like enough. But the reality is that it might not cover the total legal fees, home repairs, property replacements, or settlements involved with a lawsuit. If the costs do exceed the coverage limit, you’re responsible for paying the excess, meaning you may need to use your personal savings.

To help mitigate the potential risks you could deal with as an Airbnb host, consider acting upon the following:

  • Make sure you comply with your condominium’s policies on renting your unit (if applicable).
  • Ensure you abide by all provincial, federal, and municipal regulations.
  • Charge all guests a security deposit. You can use the money to cover minor damages.
  • Buy short-term rental insurance to enhance the coverage automatically provided by Airbnb.
  • Don’t leave treasured or expensive items inside when renting out your residence.
  • Make sure your property is furnished with easy-to-clean sofas, beds, and so on.
  • Be proactive about maintenance and repairs. After all, insurance coverage isn’t a maintenance contract.
  • Put a home security system in and around your dwelling. Smart locks and noise monitoring gadgets might also be a wise investment. Just ensure you tell your guests of their existence.

 

Why Should Airbnb Hosts Take Out Extra Home Insurance?

You need to protect yourself from risks that could cost thousands of dollars if you are offering:

  • short-term rentals of your whole home through Airbnb.
  • short-term rentals of part of your home through Airbnb.
  • short-term rentals of a condominium or seasonal property through Airbnb.

As soon as you list your dwelling on Airbnb, it turns your private residence into a business space. Your home insurance won’t cover any third-party property damage or bodily injury claims. Not to mention that your insurer may decide to void your policy, leaving you with zero protection. It’s vital to let your provider know you’re planning to home-share.

Airbnb typically offers a $1 million coverage limit. However, there are exclusions. So, acquiring additional business insurance policies is essential to keeping your business safe from all eventualities.

 

Why Choose LiabilityCover?

We do all the hard work for you. Our mission is to save you both time and money by providing a quick, tailored insurance acquisition service. We take all the confusion out of the equation, allowing you to access the policies you need with us.

We pride ourselves on being cost-effective, convenient, and diligent. You’ll receive your quote within 48 hours and know it’s accurate, thanks to our expert analysis of your insurance requirements.

The real question is, why wouldn’t you want to choose LiabilityCover?

 

Frequently Asked Questions

 

What Are Some Common Airbnb Insurance Claims?

To give you a better idea of how Airbnb insurance can help keep your business stay afloat, take a look at the real-world examples below:

 

Example One: Common Area Claim

Your condominium corporation is sued due to a peril that happened in the building’s swimming pool area. Even though your company is insured and the pool is considered a common area, the lawsuit exceeds the corporation’s coverage limit. Therefore, you and the other owners of the units are required to pay the remainder.

Thankfully, you took out loss assessment coverage which pays for your share of the claimant’s settlement. Without insurance, this situation can cause debt and even business closure, so it’s better to be safe than sorry.

 

Example Two: Fire Damage Claim

Your building is damaged during a fire. You can’t accept guests while the repairs are being made. Therefore, you must cancel your future reservations, causing a loss of income.

Luckily, your rental insurance coverage pays for the income you lost due to the fire, and your commercial property insurance pays for the repairs themselves. In this scenario, you only receive complete protection with a comprehensive Airbnb insurance package. We can help you acquire such protection from the country’s best insurers.

 

Example Three: Slip and Fall Claim

Your short-term rental guest trips over a step, falls, and hurts their arm upon entering your abode. Unfortunately, they break their arm and decide to sue you for the incident.

Your commercial general liability insurance covers the costs of your guest’s medical bills and your legal defence fees.

 

How Are Claims Made By Airbnb Hosts Deal With?

Whenever you make a claim to your insurance company, they evaluate the validity of the situation and come to a payout decision. As long as you make the claim in good faith, you’ll likely receive the money you need.

However, it’s worth remembering that you need to have the correct customized coverages from the get-go to be eligible for coverage. Therefore, we recommend speaking to one of our licensed brokerages while setting up or renewing your policy. Whichever agent we assign will know precisely how to tailor your coverage to ensure complete protection for your business.

 

Does Your Personal Homeowner Insurance Policy Cover Your Airbnb Rental?

More often than not, your current home insurance provider won’t cover the costs of third-party bodily injuries or damages. You need to ensure your insurer knows you intend to list the building on Airbnb. Failure to do so could lead to your insurer voiding your home insurance policy entirely (it counts as a breach of contract).

If cancellation occurs, getting insurance from another provider can prove incredibly expensive and difficult.

 

What’s The Difference Between Personal Tenant Insurance and Airbnb Host Protection Insurance?

Airbnb host protection is applied to all Airbnb hosts automatically. It can cover your legal responsibility for damage to your guests’ property and bodily injury. On top of that, it may offer up to $1 million in liability coverage for third-party bodily injury, but this depends on the conditions, policy terms, and exclusions.

On the other hand, personal tenant insurance is designed to protect renters or tenants of apartments, homes, or condominiums. They are similar to homeowners’ personal policies as they don’t cover short-term rentals like Airbnb. Therefore, you can’t use this policy to enhance or replace the host protection program offered by Airbnb.

 

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