AirBnb Management Liability/Insurance
Member since 2022 · 12 posts · 6 votes
AirBnb Management Liability/Insurance
Most Popular Reply
Member since 2023 · 43 posts · 20 votes
3yI'm not an expert but based on my personal knowledge. I would open a separate LLC or fill out some type of paperwork stating that you are working with Airbnb now. Your current LLC falls more into the Real Category while Airbnb deals more with Hospitality. Two different professions.
Also as a Host, you are protected in 3 different ways:
1. Airbnb $1 million host guarantee
2. Renter's Policy Insurance
3. Homeowner's Insurance ( Update your insurance; inform your insurance that you are doing Short Term Rentals.
30 Replies
- 3yJohn UnderwoodPro MemberInvestor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
Quote from @Yoon Chong:
I have a friend that wants to use one of his properties as an Airbnb rental. As he is moving out of state, I offered to manage it for him to see if STR is an investment strategy that I'm interested in. I'm a realtor and so have an LLC for my real estate business. My question is as the co-cost/listing manager what protections do I need? Will the LLC that I have extend to Airbnb management? My questions are assuming that the owner will maintain homeowners insurance to cover STRs.
What if someone sues you personally as you will be the face of the business not an LLC. I'd talk to your insurance broker.
- 3yRyan MoyerBusiness MemberProperty Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 993 posts · 1k+ votes
Unfortunately this is an extremely difficult area right now. There were only a handful of nationwide insurance companies willing to rate liability insurance on STR management, and almost none (none?) will do it anymore.
Definitely be careful, as most nationwide brokers will incorrectly rate you for traditional property management insurance, which almost always applies to LTRs and specifically excludes STRs in the fine print. I would say 9 out of every 10 I talked to didn't realize this and were happy to sign me up for a policy that wouldn't cover what I very explicitly described to them. The other 1 out of 10 understood, told me there were no options, and then went on a rant about how most insurance brokers don't really know what they're doing and just care about making the sale.
In most cases you have to find a small local company/agent for this kind of coverage. But in many cases they will just ending up routing you back through a broker which brings you back to the above scenario, so you've really gotta pick and choose well.
Keep in mind that if you do find one, there will be things you need to do on your end such as specific signage, obtaining certificate of insurance from any vendors you work with (cleaners, handyman, pool guy), etc.
Safely I believe also includes liability as an option in addition to their usual damage protection at an extra cost, though in that case you're paying on a per booking basis rather than a yearly fee, and it's likely going to be quite a bit more expensive. The advantage to this is you don't have to worry about your vendors keeping up with their licensing/insurance as much as Safely doesn't care about that.
Cosmic Vacations4.9172 Reviews - 3ySarah KensingerPro MemberReal Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
You may be able to use the same LLC but if depends on what real estate business you're doing. It might be better to just create a new LLC and EIN number to keep the management side separate. But you could wait and see if you enjoy managing STR before creating another LLC.
Insurance is important! But so is the setting up the right entity! Check into Wister a sister company to Proper that understands STR and PM of them. Make sure to ask about including errors and omissions policy, then if something happens like a software malfunction, etc. and you cost the homeowner thousands of dollars, you have insurance to cover that.
Safely or Waivo are nice to have as well, they cover damage from a guest including sheets and towels, and I think also thief. Those companies would not cover you as a PM.
Hope that helps!
- Member since 2023 · 43 posts · 20 votes3y
I'm not an expert but based on my personal knowledge. I would open a separate LLC or fill out some type of paperwork stating that you are working with Airbnb now. Your current LLC falls more into the Real Category while Airbnb deals more with Hospitality. Two different professions.
Also as a Host, you are protected in 3 different ways:
1. Airbnb $1 million host guarantee
2. Renter's Policy Insurance
3. Homeowner's Insurance ( Update your insurance; inform your insurance that you are doing Short Term Rentals.
- 3ySarah KensingerPro MemberReal Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
Quote from @Jeffrey Reyes:
I'm not an expert but based on my personal knowledge. I would open a separate LLC or fill out some type of paperwork stating that you are working with Airbnb now. Your current LLC falls more into the Real Category while Airbnb deals more with Hospitality. Two different professions.
Also as a Host, you are protected in 3 different ways:
1. Airbnb $1 million host guarantee
2. Renter's Policy Insurance
3. Homeowner's Insurance ( Update your insurance; inform your insurance that you are doing Short Term Rentals.
The OP is not working for Airbnb but a homeowner who would like to list their property on the Airbnb listing website but wants someone else to do the work. Also be aware that you cannot count on Airbnb Cover, you have to jump through so many hoops to get your money for guest damages. Many times, they won't pay out for a variety of reasons. There shouldn't be renters' insurance, just STR homeowners' insurance and if you want protection for guest damages Safely, Waivo, etc.
- Investor · Meadville, PA · Member since 2021 · 75 posts · 45 votes3y
I would definitely consult with an insurance broker and possibly also an attorney about this.
I personally would set up a separate legal entity whose purpose is to manage STRs. I would put no other assets into this entity such that, if it is sued, there is nothing to lose.
One tenet of nearly all asset protection strategies is to not to mix risk types within one LLC. In other words, in traditional rentals, the entity that owns the rental should not be the entity that manages the rental. The rental-owning entity is full of assets and should have good liability coverage and probably a commercial umbrella. The management entity should hold essentially no assets since it is likely to be sued at some point.
I would also think about E/O (errors and omissions) insurance coverage.
I hope that this helps! Good luck.
- Member since 2022 · 12 posts · 6 votes3y
Quote from @Sarah Kensinger:
You may be able to use the same LLC but if depends on what real estate business you're doing. It might be better to just create a new LLC and EIN number to keep the management side separate. But you could wait and see if you enjoy managing STR before creating another LLC.
Insurance is important! But so is the setting up the right entity! Check into Wister a sister company to Proper that understands STR and PM of them. Make sure to ask about including errors and omissions policy, then if something happens like a software malfunction, etc. and you cost the homeowner thousands of dollars, you have insurance to cover that.
Safely or Waivo are nice to have as well, they cover damage from a guest including sheets and towels, and I think also thief. Those companies would not cover you as a PM.
Hope that helps!
Thanks for the info and the recommendation. Setting up a separate LLC makes sense to me.
- Member since 2022 · 12 posts · 6 votes3y
Quote from @Sarah Kensinger:
Quote from @Jeffrey Reyes:
I'm not an expert but based on my personal knowledge. I would open a separate LLC or fill out some type of paperwork stating that you are working with Airbnb now. Your current LLC falls more into the Real Category while Airbnb deals more with Hospitality. Two different professions.
Also as a Host, you are protected in 3 different ways:
1. Airbnb $1 million host guarantee
2. Renter's Policy Insurance
3. Homeowner's Insurance ( Update your insurance; inform your insurance that you are doing Short Term Rentals.
The OP is not working for Airbnb but a homeowner who would like to list their property on the Airbnb listing website but wants someone else to do the work. Also be aware that you cannot count on Airbnb Cover, you have to jump through so many hoops to get your money for guest damages. Many times, they won't pay out for a variety of reasons. There shouldn't be renters' insurance, just STR homeowners' insurance and if you want protection for guest damages Safely, Waivo, etc.
I'm not the homeowner but potentially the co-host/property manager. Protection from Safely ir Waivo would be something that the homeowner purchases correct, not the property manager?
- Member since 2022 · 12 posts · 6 votes3y
Quote from @Charley Gates:
I would definitely consult with an insurance broker and possibly also an attorney about this.
I personally would set up a separate legal entity whose purpose is to manage STRs. I would put no other assets into this entity such that, if it is sued, there is nothing to lose.
One tenet of nearly all asset protection strategies is to not to mix risk types within one LLC. In other words, in traditional rentals, the entity that owns the rental should not be the entity that manages the rental. The rental-owning entity is full of assets and should have good liability coverage and probably a commercial umbrella. The management entity should hold essentially no assets since it is likely to be sued at some point.
I would also think about E/O (errors and omissions) insurance coverage.
I hope that this helps! Good luck.
This does help significantly. I appreciate the advice.
- Member since 2022 · 12 posts · 6 votes3y
Quote from @Jeffrey Reyes:
I'm not an expert but based on my personal knowledge. I would open a separate LLC or fill out some type of paperwork stating that you are working with Airbnb now. Your current LLC falls more into the Real Category while Airbnb deals more with Hospitality. Two different professions.
Also as a Host, you are protected in 3 different ways:
1. Airbnb $1 million host guarantee
2. Renter's Policy Insurance
3. Homeowner's Insurance ( Update your insurance; inform your insurance that you are doing Short Term Rentals.
Does protection from Airbnb extend to both property owner and manager?
- 3yRyan MoyerBusiness MemberProperty Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 993 posts · 1k+ votes
Quote from @Yoon Chong:
Quote from @Sarah Kensinger:
Quote from @Jeffrey Reyes:
I'm not an expert but based on my personal knowledge. I would open a separate LLC or fill out some type of paperwork stating that you are working with Airbnb now. Your current LLC falls more into the Real Category while Airbnb deals more with Hospitality. Two different professions.
Also as a Host, you are protected in 3 different ways:
1. Airbnb $1 million host guarantee
2. Renter's Policy Insurance
3. Homeowner's Insurance ( Update your insurance; inform your insurance that you are doing Short Term Rentals.
The OP is not working for Airbnb but a homeowner who would like to list their property on the Airbnb listing website but wants someone else to do the work. Also be aware that you cannot count on Airbnb Cover, you have to jump through so many hoops to get your money for guest damages. Many times, they won't pay out for a variety of reasons. There shouldn't be renters' insurance, just STR homeowners' insurance and if you want protection for guest damages Safely, Waivo, etc.
I'm not the homeowner but potentially the co-host/property manager. Protection from Safely ir Waivo would be something that the homeowner purchases correct, not the property manager?
No, Safely/Waivo are on a per booking basis, and would be purchased by the property manager.
Waivo I believe offers ONLY damage protection and is no help with liability. Safely offers damage protection and (for an additional cost) liability as well, the covers ONLY the booking the policy was purchased for.
With Safely you would pay, for instance, $70 per booking and Safely would cover you for damage and liability (again, check with them directly on this, I am not associated with the company so I can't say for sure they do liability!) for that booking. They then set it up so each booking is automatically charged $70 so each booking is covered.
If you're getting lots of bookings it's likely far more expensive than traditional liability insurance for your LLC that is paid on an annual basis. But again, the problem is finding someone to write liability insurance for an STR property manager right now.
Cosmic Vacations4.9172 Reviews - 3yMichael BaumPro MemberOlympia, WA · Member since 2016 · 8k+ posts · 7k+ votesI don't believe so. It will cover the owners losses. It would be up to you to work with the owner to pay you for losses.
Quote from @Yoon Chong:
Quote from @Jeffrey Reyes:
I'm not an expert but based on my personal knowledge. I would open a separate LLC or fill out some type of paperwork stating that you are working with Airbnb now. Your current LLC falls more into the Real Category while Airbnb deals more with Hospitality. Two different professions.
Also as a Host, you are protected in 3 different ways:
1. Airbnb $1 million host guarantee
2. Renter's Policy Insurance
3. Homeowner's Insurance ( Update your insurance; inform your insurance that you are doing Short Term Rentals.
Does protection from Airbnb extend to both property owner and manager?
- 3ySarah KensingerPro MemberReal Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votesNo that would be your responsibility as the PM. Usually the monthly charge is wrapped up in the nightly rate.
Quote from @Yoon Chong:
Quote from @Sarah Kensinger:
Quote from @Jeffrey Reyes:
I'm not an expert but based on my personal knowledge. I would open a separate LLC or fill out some type of paperwork stating that you are working with Airbnb now. Your current LLC falls more into the Real Category while Airbnb deals more with Hospitality. Two different professions.
Also as a Host, you are protected in 3 different ways:
1. Airbnb $1 million host guarantee
2. Renter's Policy Insurance
3. Homeowner's Insurance ( Update your insurance; inform your insurance that you are doing Short Term Rentals.
The OP is not working for Airbnb but a homeowner who would like to list their property on the Airbnb listing website but wants someone else to do the work. Also be aware that you cannot count on Airbnb Cover, you have to jump through so many hoops to get your money for guest damages. Many times, they won't pay out for a variety of reasons. There shouldn't be renters' insurance, just STR homeowners' insurance and if you want protection for guest damages Safely, Waivo, etc.
I'm not the homeowner but potentially the co-host/property manager. Protection from Safely ir Waivo would be something that the homeowner purchases correct, not the property manager?
- Rental Property Investor · Phoenix, AZ and Rehoboth Beach DE · Member since 2019 · 1k+ posts · 1k+ votes3y
Don’t count on Airbnb for any real coverage. Some hosts have had good experiences with minor payouts when guests do damage, but others have had to fight and then are paid a fraction of the repair costs.
- 3yCollin HaysBusiness MemberProperty Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
If you are managing a rental in any capacity, you will likely be a defendant in a lawsuit involving the property. Plan and insure accordingly.
- Property Manager · Anchorage · Member since 2021 · 54 posts · 42 votes3y
It seems the general consensus is that it is nearly impossible to get liability insurance as a STR manager? What are STR management companies using then?
- 3ySarah KensingerPro MemberReal Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
Quote from @Kaiden Foster:
It seems the general consensus is that it is nearly impossible to get liability insurance as a STR manager? What are STR management companies using then?
Copy and pasted what I posted at the beginning of the thread....
Insurance is important!......Check into Wister a sister company to Proper that understands STR and PM of them. Make sure to ask about including errors and omissions policy, then if something happens like a software malfunction, etc. and you cost the homeowner thousands of dollars, you have insurance to cover that.
Safely or Waivo are nice to have as well, they cover damage from a guest including sheets and towels, and I think also thief. Those companies would not cover you as a PM.
Hope that helps!
- Property Manager · Anchorage · Member since 2021 · 54 posts · 42 votes3y
Quote from @Sarah Kensinger:
Quote from @Kaiden Foster:
It seems the general consensus is that it is nearly impossible to get liability insurance as a STR manager? What are STR management companies using then?
Copy and pasted what I posted at the beginning of the thread....
Insurance is important!......Check into Wister a sister company to Proper that understands STR and PM of them. Make sure to ask about including errors and omissions policy, then if something happens like a software malfunction, etc. and you cost the homeowner thousands of dollars, you have insurance to cover that.
Safely or Waivo are nice to have as well, they cover damage from a guest including sheets and towels, and I think also thief. Those companies would not cover you as a PM.
Hope that helps!
Tried to look up Wister but all their links redirect to a waste removal company in the UK... Are they still around?
- 3yCollin HaysBusiness MemberProperty Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votesI believe our policy is underwritten by Eerie. Business liability insurance is easy to find.
Quote from @Kaiden Foster:
It seems the general consensus is that it is nearly impossible to get liability insurance as a STR manager? What are STR management companies using then?
- 3ySarah KensingerPro MemberReal Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votesWhat the world...I think the domain has been messed with. I'll try to get some info from them tomorrow and see what's going on.
Quote from @Kaiden Foster:
Quote from @Sarah Kensinger:
Quote from @Kaiden Foster:
It seems the general consensus is that it is nearly impossible to get liability insurance as a STR manager? What are STR management companies using then?
Copy and pasted what I posted at the beginning of the thread....
Insurance is important!......Check into Wister a sister company to Proper that understands STR and PM of them. Make sure to ask about including errors and omissions policy, then if something happens like a software malfunction, etc. and you cost the homeowner thousands of dollars, you have insurance to cover that.
Safely or Waivo are nice to have as well, they cover damage from a guest including sheets and towels, and I think also thief. Those companies would not cover you as a PM.
Hope that helps!
Tried to look up Wister but all their links redirect to a waste removal company in the UK... Are they still around?
- 3yMichael BaumPro MemberOlympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
So I took a quick look at Wister.insure. That seems to be the website, but it is quarantined for being a risk.
That could mean a bunch of things. From a simple SSL cert issue to an actual compromised site.
@Sarah Kensinger, be careful when researching. If you can get them on the phone, that would be best. A site like that can cause you a world of grief.
- New to Real Estate · ATX/SF · Member since 2018 · 29 posts · 7 votes3y
@Yoon Chong I do not think you will be sued, but it is worthwhile to have some type of coverage over the maximum deductible allowed. I have been involved in some minor legal issues and my attorneys advised it isn't worth it to sue unless you have a good case and the damages are over $25,000. Thankfully, I won all of them. I think users of your Airbnb would be hard press to prove damages of $25,000. So get the max deductible.
- Real Estate Agent · Emerald Coast, FL · Member since 2016 · 820 posts · 486 votes3y
Don't know if anyone mentioned this already or not, but check to be sure your RE license will allow you to manage property on a commission basis for other people without a CAM license. Don't risk your license for this!
- 3yRyan MoyerBusiness MemberProperty Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 993 posts · 1k+ votes
Quote from @Kaiden Foster:
It seems the general consensus is that it is nearly impossible to get liability insurance as a STR manager? What are STR management companies using then?
I talked to a lot of management companies to try and figure this out, and get contacts from them. I found two repeat things.
1) Insurers that used to offer on STR, but no longer do
2) Insurers that offer on "property management" which does not include STR, but the people buying the policy didn't notice.
#2 is the scary one. I had probably 10 people refer me to Hiscox. The first 2 agents at Hiscox were happy to sell me "property management" insurance even after I explained to them explicitly what I did (short term rentals only). It wasn't until the 3rd agent finalizing things that they said the policy does not cover STR, and that they do have a policy that covers STR.
Ultimately your best bet is going to be to find a local company. Most of the national ones won't do it. Someone in the same zip code as your property. Those still exist. Obviously this will be a pain if you operate in multiple markets, but it is what it is.
Cosmic Vacations4.9172 Reviews - 3ySarah KensingerPro MemberReal Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votesThe link is back up and running.....Wister Insurance
Quote from @Kaiden Foster:
Quote from @Sarah Kensinger:
Quote from @Kaiden Foster:
It seems the general consensus is that it is nearly impossible to get liability insurance as a STR manager? What are STR management companies using then?
Copy and pasted what I posted at the beginning of the thread....
Insurance is important!......Check into Wister a sister company to Proper that understands STR and PM of them. Make sure to ask about including errors and omissions policy, then if something happens like a software malfunction, etc. and you cost the homeowner thousands of dollars, you have insurance to cover that.
Safely or Waivo are nice to have as well, they cover damage from a guest including sheets and towels, and I think also thief. Those companies would not cover you as a PM.
Hope that helps!
Tried to look up Wister but all their links redirect to a waste removal company in the UK... Are they still around?
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