As we rocket towards the festive break, many landlords will be looking at tapping into the Airbnb juggernaut and offering their properties on shared accommodation platforms. But before they welcome guests, it’s imperative that the right landlord insurance is in place.
In a heart-breaking incident, a four-year-old boy was killed at a property being rented out via Airbnb on the Sunshine Coast in September. The boy had been playing on a homemade swing when it toppled down a slope, causing the wooden crossbar to fatally strike him in the head. A seven-year-old girl sustained a broken arm in the incident.
The tragic death of one child and the injury of another has shone a light on the question of legal liability at Airbnbs – and, importantly, revealed the insurance gap that exists if the property owner (host) does not have specialist short-term landlord cover.
Relying on Airbnb’s Host Protection Insurance is fraught with risk as, while it offers up to US$1 million in cover “in the event of a third-party claim of bodily injury or property damage” during an Airbnb stay, it generally only applies when the host or landlord has been at fault or been negligent in the circumstances of the injury.
In this specific case, there would be a need to prove that the owner of the property was aware, or should have been aware, that the swing posed a risk to children who used it – and, in light of that knowledge, that they had failed to repair and maintain the swing or remove it. If it is determined that this was an accident – that no-one was at fault – then there would be no compensation payable.
If, however, it could be proved that the swing was clearly unsafe and the property owner should have been aware it posed a risk, but failed to repair or remove it, then the family of the children could have grounds to lodge a personal claim against the host.
Legal liability claims are not that uncommon when it comes to short-term/Airbnb rentals and even minor mishaps can prove costly, as this recent RentCoverShortTerm claim illustrates:
A guest went to hang washing on the line. The path to the line was made of old railway sleepers embedded in the ground and one of these was apparently uneven. The guest was wearing high heels, lost balance, and broke an ankle. The policyholder was able to make a successful claim for the $15,000 that had to be paid to the injured guest for medical costs and lost earnings.
The best way for a host/landlord to protect their legal liability when renting their property via Airbnb is to have a specialist landlord policy that covers the risks associated with short-term leasing and one which specifically covers renting via shared accommodation platforms (many insurers who offer short-term policies exclude this type of arrangement).
Of course, hosts/landlords and their agents should also reduce the risk of being responsible for damage to property, or compensation for an injured guest, by making sure they take steps to avoid any potential liability in the first place. A key to this is ensuring the property is safe and well maintained (and as an agent you have a duty of care to make sure that this is the case).
But the reality is sometimes things happen that are beyond the host/landlord or agent’s control – and when they do, it pays to make sure that your landlord has the right insurance in place to cover such an eventuality. Having a guest injured, or worse, on the property is bad enough; finding out that your landlord is legally liable but not insured could be a financial disaster for them and a nightmare for you too (especially if you find yourself ‘joined’ in any legal proceedings and are found culpable – so make sure your Professional Indemnity cover is up to date).
Tick ‘check insurance cover’ off your to-do list as you help landlords prepare their short-term rentals for the onslaught of summertime holidaymakers and it just might be the season to be jolly!