In a Vacation Rental business, accidents can happen and an unimagined disaster like your guests falling from the terrace or balconies or burning down the house or anything else could spell financial ruin. So, it’s very important to get the right short-term rental liability insurance in place.
Luckily, you run your rental business for years without having any such issues, but unforeseen tragedies and accidents may ruin everything. So, it’s better to be prepared for the day when your luck is not with you. It will help you to live free from any mental stress and sleep better at night.
What Types of Accidents can happen in your vacation rental?
Different types of accidents can happen in your vacation rental like electric shocks, burns, slips, falls, and more. Mainly they are categorized in two forms the first one is physical injury and another one is property damage. Let’s discuss them one by one.
Physical Injury
When someone is physically injured on your rental property like a sudden collapse of a staircase or fall ill because of any bacterial infection or anything else, you could be liable in terms of premises liability law.
In this law, the caring responsibility of the guests is on the property’s owner, so you has a legal duty to guests to remove any hazards that could potentially cause an injury.
Some common reasons for physical injuries are:
- Broken stairways
- Spills or Slippery surfaces
- Loose or torn rugs or carpets
- Water leaks
- Poor lighting
Property Damage
Property damage covers the part of the building or inside the building. For example, if your rental vacation property does not have a smoke detector and a fire breaks out that causes damage to your guests’ possessions like luggage, clothes, or anything else, you are liable for that accident.
So, what you should do? How you can run your business safely and reduce the risk of liability claims that could cause a serious dent in your bank account, if not ruin your business?
Does Your homeowner’s insurance cover your rental?
Usually, a homeowner takes an insurance policy to cover any damage or loss of your home and possession. It covers liability coverage means if something could happen to someone else on your property, the insurance company will pay for the case of an accident at your home.
However, you should aware that many homeowner insurance policies don’t cover or offer minimal protection in the case where you are using your property as a vacation rental, or in fact if the property is used to run any type of business.
So, it will be great to carefully read your insurance policy contract to set up if the insurer will payout in the case of accidents involving the renter. In some cases, you may be able to pay an additional fee to extend your policy, but if you rent out your property regularly, this may not work.
So, it will be best to see another option, which means you should take a hotel or bed-and-breakfast insurance policy, they are more expensive than the above one. Some agencies offer short-term rental liability insurance. If your property is damaged by your guests because of any reason, your regular home insurance policy does not payout and you’ll have to take additional measures.
What Coverage does your hosting platform provide?
Now, there are many online travel agencies (OTAs) or listing channels that have come to the party to offer some degree of protection, both to the property’s owner and guests. This is a great initiative, but when you read the term, this doesn’t usually go as far as insurance, and there are many exceptions.
Final Words:
So, from the above, it will be clear to you that you should consider or plan of taking short-term liability insurance when you first start your vacation rental business. We wish you’ll never need to use it though!
