Negligent sSecurity Cases Against STR Hosts Are Picking Up

[Michael Koeplin]

Did anyone catch the Law.com piece from earlier this week? The headline was a direct quote from The Haggard Law Firm: "We're Getting Calls Every Single Day." They were talking about STR negligent security cases. The firm just settled for $16.25 million in a fatal shooting at ChampionsGate near Disney World and now has more than a dozen active or recently closed suits involving Airbnb and VRBO.

I work in STR insurance so I've been watching this case category for a while. Most of the conversations in this space are still about homeowner's policy exclusions and whether AirCover is real insurance (it isn't). Both of those matter but I think they're starting to miss a bigger shift in how these cases are being litigated.

The ChampionsGate case is worth understanding because the theory wasn't "the host or property caused the crime." It was "you knew this community had a documented criminal history and you didn't do enough about it." Broken access gates, inadequate surveillance, understaffed security, and it came out that some of the individuals involved had prior incidents in the same area. The family's legal team argued ChampionsGate withheld information about a spike in violent crime that could have changed where the victim chose to stay.

That's a foreseeability argument, not a premises defect argument. Different legal standard, and harder to defend against because it's about what you knew before anything happened.

There's also a case out of California, Elhania v. Airbnb, where a court let a negligent security suit against Airbnb itself survive a motion to dismiss last year. First time that's happened from what the attorneys said. Party at a Sunnyvale rental, social media promoted, 150-200 people showed up, neighbor complaints before the shooting. Airbnb's usual platform defense didn't hold.

Worth noting that the foreseeability argument doesn't only apply to violent crime situations. That's just where the largest settlements are coming from. The same legal standard applies any time there's a documented warning that a problem existed and didn't get addressed. A prior guest complaint about a loose railing. A platform message flagging a slippery entry step. A noise complaint that brought a police contact. Any of those create a record that someone knew a risk was present. The shooting cases are the dramatic version of the same argument a plaintiff's attorney makes after a bad slip and fall.

The thing is, even a standard two or three bedroom host isn't necessarily clear of this. The cases making headlines are large ones, but the legal argument doesn't require scale. It requires documentation that a warning existed and wasn't acted on. A prior guest complaint in a review, a message through the platform about a hazard, a noise call that brought police contact. Any of that is the beginning of a foreseeability record. Plaintiffs' attorneys will use whatever's there.

The coverage question is worth asking regardless of property size. A lot of standard policies have assault and battery exclusions or criminal act limitations that would push a negligent security claim outside coverage entirely. Most hosts have no idea how their policy handles it because they've never asked. Has anyone here actually had that conversation with their carrier?

[Collin Hays]

1.  Most homeowners believe that video reduces their liability. It actually can exponentially INCREASE their liability.  

2.  Gross negligence is a thing.  Out of the hundred questions I see from investors about STRs and how much more money they can make if they only add a hot tub or a bean bag chair, NEVER does a homeowner ask "Does owning this property put my entire estate in jeopardy?"