So, you’re a short-term rental (STR) property owner. Congratulations! It can be a lucrative venture. But have you ever stopped to think about what happens if a guest gets injured on your property? It’s not a fun topic, but the truth about who pays can be a real eye-opener. The consequences of a guest injury can range from minor inconveniences to devastating financial losses. Let’s dive into the realities of liability and how to protect yourself.
Understanding the Risks: Injuries at Your Short-Term Rental
Think beyond just a slip and fall. Injuries at STRs can be surprisingly diverse. Imagine a guest tripping on uneven pavers in your garden, suffering burns from a faulty grill, or even being bitten by a dog you allow on the premises. Swimming pools are a high-risk area with potential for drowning or diving-related injuries. Defective appliances, poorly maintained decks, and inadequate lighting all contribute to potential hazards.
The reality is, as a property owner, you’re responsible for maintaining a safe environment for your guests. According to a recent study by the National Safety Council, unintentional injuries are a leading cause of death and disability in the U.S. and many of these injuries happen in and around the home. While the study doesn’t specifically focus on STRs, it highlights the general risk we face from hazards in residential settings.
Property Owner Liability: Negligence and Duty of Care
At the heart of injury claims lies the concept of negligence. To prove negligence, a guest typically needs to show that you, as the property owner, had a duty of care, breached that duty (by failing to maintain a safe property), and that this breach directly caused their injury. This means proving you knew, or should have known, about a hazard and failed to fix it.
Duty of Care: As an STR owner, you have a legal duty to take reasonable steps to protect your guests from foreseeable harm. This includes regularly inspecting your property for hazards, making necessary repairs, and warning guests about potential dangers.
For example, let’s say a guest trips and falls on a loose step on your porch. If you knew the step was loose and didn’t repair it or warn guests about it, you could be found negligent.
Conversely, if a guest ignores clearly posted “No Diving” signs at your pool and injures themselves, your liability might be reduced (more on that later).
Successful and Unsuccessful Lawsuit Examples:
- Successful: In one case, a guest successfully sued a homeowner after falling through a rotted deck board. The homeowner admitted he knew the deck was in disrepair but had not taken action. The jury awarded the guest significant damages.
- Unsuccessful: A guest sued an STR owner after slipping on ice during an unexpected winter storm. The court ruled in favor of the owner because the snowstorm was considered an “act of God” and the owner couldn’t reasonably have prevented the icy conditions in time to prevent injury.
Comparative Negligence: Even if you’re found negligent, the guest’s own actions can affect the outcome. Many states follow the principle of comparative negligence, meaning the injured party’s compensation can be reduced if they are also found to be at fault for their injury. For example, if a guest was intoxicated when they fell, their settlement might be reduced by the percentage of fault attributed to their intoxication.
Insurance Coverage for Short-Term Rental Injuries
Don’t assume your homeowner’s insurance will cover injuries sustained at your STR. Many policies specifically exclude short-term rental activities. You’ll likely need specialized short-term rental insurance or a rider to your existing policy.
Homeowner’s Insurance: Standard homeowner’s insurance often doesn’t cover commercial activities like short-term rentals.
Short-Term Rental Insurance: This type of insurance is specifically designed for STRs and provides liability coverage for guest injuries, property damage, and lost rental income. Companies like Proper Insurance and CBIZ offer such tailored policies.
Airbnb’s Host Protection Insurance: Airbnb provides Host Protection Insurance, offering liability coverage up to $1 million per occurrence. However, it’s important to understand that this is secondary coverage, meaning it only kicks in after your own insurance policy has been exhausted. Also, there are exclusions, such as intentional acts or injuries arising from certain activities. VRBO offers similar liability protection. Never rely solely on these platforms’ protection.
Waivers and Disclaimers: While having guests sign waivers or disclaimers might seem like a good idea, their enforceability varies by state and circumstance. A well-written waiver can potentially limit your liability, but it’s not a foolproof solution. Consult with an attorney to ensure your waiver is legally sound in your jurisdiction.
The Importance of Guest Safety: Preventing Injuries on Your Property
Prevention is always better (and cheaper!) than cure. Thoroughly inspect your property regularly. Address any potential hazards immediately. Install grab bars in bathrooms, ensure adequate lighting, and keep walkways clear of obstructions. Provide clear instructions for using appliances and amenities. Consider a professional safety audit to identify potential blind spots.
What To Do After an Injury Occurs at Your Short-Term Rental: A Step-by-Step Guide
- Prioritize the guest’s well-being: Call emergency services if necessary and provide immediate assistance.
- Document the incident: Take photos of the scene, the hazard, and the guest’s injuries. Obtain witness statements if possible.
- Report the incident: Notify Airbnb or VRBO of the injury as soon as possible.
- Contact your insurance company: File a claim with your short-term rental insurance provider.
- Avoid admitting fault: Refrain from making statements that could be construed as an admission of guilt.
- Seek legal counsel: Consult with an attorney experienced in premises liability cases.
Minimizing Your Risk as a Short-Term Rental Property Owner
- Invest in comprehensive insurance coverage. Don’t rely solely on Airbnb’s or VRBO’s protection.
- Maintain your property meticulously. Conduct regular inspections and address hazards promptly.
- Communicate clearly with guests. Provide detailed instructions, warnings, and safety guidelines.
- Consult with legal and insurance professionals. Ensure you have adequate protection and understand your legal obligations.
- Consider using a property management company: A reputable company will have systems in place to manage risks and handle guest issues, but make sure their insurance covers your liability as well. If you are an individual owner, YOU are ultimately responsible.
Protecting yourself and your guests is not only the right thing to do, but it also ensures the long-term success and peace of mind in your short-term rental business. Ignoring these risks is a gamble you simply can’t afford to take.
