What Insurance You Need for Your Airbnb
You face liability risks with your Airbnb rental. You need to protect your short-term property rental with a customized Airbnb insurance package.
It’s unlikely that your home insurance policy would cover the cost of injured guests or property damages at your Airbnb rental. Your insurer should also know that you are listing your home or condo on Airbnb, VRBO, or any other home-sharing website, or you can risk having your home insurance policy voided for breach of contract.
No matter your location in Toronto, the Greater Toronto Area (GTA) or anywhere in Ontario, your Western Financial Group business insurance expert will give you top-notch advice on insurance for your short-term property rental. We’ll get you customized insurance to protect your Airbnb rental property.
Airbnb insurance or home-sharing insurance helps protect you from these 3 claims:
1. Slips and falls
One of your guests slips and falls on the stairs on the steps to your rental property and breaks an ankle. Your commercial general liability (CGL) insurance may cover the cost of the injured guest’s medical expenses and help cover legal advice if you are being sued.
A guest knocks over a candle, starting a fire that causes damage in your Airbnb rental. Your commercial property insurance can provide coverage for physical loss or damage to your property and its contents caused by fire.
3. Cyber breaches
Your computer has been hacked, compromising the security of your guests’ information and their payments. Without cyber liability insurance, you will have to pay out of your pocket for the cost of restoring your system. You may also be liable for damages to third parties whose information has been stolen.
At Western, we will save you time and money by doing the insurance shopping for you to find the right package at the right value for your Airbnb insurance.
What do I need in my short-term rental property insurance package?
Commercial general liability (CGL) insurance
It’s also known as “slip-and-fall” insurance because it protects against claims alleging third-party bodily injuries, such as an Airbnb guest slipping and falling and is injured. CGL may provide financial coverage for third-party medical expenses and your legal fees if you are sued.
CGL insurance generally helps cover medical fees, legal expenses, and settlements regardless of the outcome of a lawsuit by an Airbnb guest against you.
It can also help protect you against third-party property damage, false advertising, and libel or slander.
Without commercial general liability insurance, you would be responsible for paying any liability costs out of your own pocket.
You should also consider sewer backup coverage for your short-term rental. It protects you from loss or damage to rental property caused by the rupture or escape of water from a sewer, drain, sump pump, or septic system.
Commercial property insurance
It protects your short-term rental against physical losses or damages and its contents due to fire, theft, or vandalism. It typically includes coverage for the property’s physical assets such as your rental’s furniture and contents and as well as any electronics that are stolen or damaged.
It can also protect damages to the rental property caused by a guest, such as accidental spills or damage to the furniture, walls, or floors.
This type of coverage provides you with protection if you lose rental income due to damages to your property because of a fire, flood, or other insured perils.
Loss assessment coverage
If you operate an Airbnb in a condo building, loss assessment coverage can help you. Since condo owners share ownership and maintenance responsibilities with others, loss assessment coverage can protect you if a claim is brought against the condominium corporation that exceeds its insurance policy limit.
Contingent unit insurance
If you own a condo or apartment, contingent unit insurance covers the gap in your condo corporation’s policy that doesn’t protect your unit, such as specific perils or events like a flood.
What does Airbnb provide any coverage?
With Airbnb, damage protection reimburses you for damage caused by guests to your home and belongings for up to $3 million, while liability insurance is $1 million should a guest get hurt or their belongings are damaged or stolen. Beyond those limits, you are financially responsible.
Why do I need extra insurance if Airbnb provides coverage?
When you rent out your home or your basement apartment or your condo on Airbnb, it affects the coverage you need and the level of risk the insurance company is taking on. While Airbnb provides some protection, there are some gaps in coverage for which you would be responsible.
For example, you would have to keep paying the mortgage, taxes, and condo fees without any short-term rental income.
How to mitigate risks with your short-term rental
- Have the proper insurance for your Airbnb rental to protect yourself.
- If you are renting out your condo on Airbnb, make sure your condo association permits this.
- Make sure that your Airbnb rental complies with all provincial, federal, and municipal regulations.
- Furnish your short-term rental with durable and easy-to-clean furniture and decor.
- Don’t forget to charge your guests a security deposit to protect your property.
- Consider stalling an alarm system.
- Make sure all repairs and maintenance are up to date.
What do I do if I have an insurance claim?
- Contact your broker immediately after any business-related mishap. Waiting to file a claim can confuse insurers about the severity of the damages to your business.
- Know your policy so that when you contact your broker you are familiar with what will be covered or not.
- Document the damage. Take photos right away and write down what happened.
- Do not throw away damaged goods after taking photos. Keep the physical evidence so that your adjustor can see it.
- Do not invite lawsuits. Don’t say anything that could be used against you, especially if you aren’t sure what happened.
- Be honest about what your damaged property is worth. Damaged commercial property is generally valued according to its actual cash value or replacement value.
Western Insurance has licensed BUSINESS INSURANCE EXPERTS to get you the right insurance package for your Airbnb or short-term rental. Our experts are available now to help you navigate the business insurance journey to protect you and your Airbnb rental.
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