Unless you have been living in a cave the past 10 years, you have heard of AirBnB. Through their web site, people can rent out their apartment, their house, a room in their house or even a couch to people willing to forgo staying at a hotel. But what are the legal liabilities of AirBnB?
History of the “Bed & Breakfast”
The concept of a BnB, “Bed and Breakfast,” is nothing new. While not particularly popular in the United States, BnB’s are popular across Europe and many parts of the world. A person rents out a room, similar to a hotel, which usually includes a breakfast. Both the host and the people staying at the BnB typically enjoy the personal interaction and BnB’s offer rates cheaper than staying at a traditional hotel.
In 2008, a couple of young people decided to rent out a couch in their overpriced San Francisco apartment to help defray the expense of their monthly rent. Thus was born the idea for AirBnB. Knowing a little about the internet and web sites, these entrepreneurial millennials allowed people to “host” people who wanted to stay at their particular dwelling. Some AirBnB’s are palatial estates and some are merely a couch in an apartment. The founders of AirBnB realized there were people who wanted a place to stay other than a traditional hotel. With fairly simplistic internet technology, the founders were able to match people who needed a place to stay with people willing to make some money by opening their homes and apartments to guests. By charging a small service fee for putting a willing buyer and a willing seller together, AirBnB has grown to a $30 billion dollar company.
According to Wikipedia, AirBnB has over 3,000,000 listings in 65,000 cities in 191 countries. What started as a place to sleep has grown into something much greater. AirBnB promotes casual travelers, business travelers and offers people the chance to stay in places they would never otherwise dream of renting. All the while, allowing property owners the opportunity to make money, and making AirBnB A LOT of money.
OK, this is not an advertisement for AirBnB. As you know, we are personal injury lawyers at McCready, Garcia & Leet. We see a company like AirBnB and ask, what are the legal liabilities? If you stay at an AirBnB, what are your rights and if you host on AirBnB, what are your liabilities?
Guests at Air BnB
Simply put, if you stay at an AirBnB, you do so at your own risk. The contractual arrangement between AirBnB and their hosts essentially eliminate any liability against AirBnB. While the company does not guarantee the places people host, you largely do so at your own risk. AirBnB relies extensively on reviews. Not only can guests review the premises, hosts can review the guests. In fact, neither a guest nor a host can post a review unless both of them submit a review of each other. While this requirement is not necessarily aimed at preventing liability, it does allow guests to weed out poor hosts and hosts to warn against guests who abuse the hospitality.
As a guest, if you rent a place which is not as advertised, your remedy is to leave a negative review and warn future renters of the pitfalls of the rental property. Don’t look to AirBnB to refund your money for a poor experience. Guest beware could be a motto for Air BnB. But what if a guest is injured while staying at an AirBnB? The answer to whether you can recover is covered below on liability for hosts under AirBnB.
Host liability with AirBnB
As with guests, the contract between hosts and AirBnB essentially immunizes the company from liability. AirBnB acts as a broker, putting willing hosts together with willing guests. Don’t look for anything more than that when it comes to liability. In theory, AirBnB may be able to be sued if it allowed a dangerous host to remain as a member, but AirBnB has so many safeguards that they remove any potentially dangerous hosts well before anything happens to a guest. If something were to happen to a guest at a first time host, AirBnB could credibly claim they had no notice of any potential danger. If AirBnB cannot be legally held responsible, what recourse does an injured guest have and what liability does a host have in the event of an injury?
Insurance coverage for Air BnB
If you have continued to read this far, this is the heart of the matter. As the lawyers at McCready, Garcia & Leet will tell you, unless there is insurance coverage, there is essentially no recovery for injuries. So, let’s examine a typical insurance policy. Anyone who owns a home has a homeowner’s policy and some renters have a renter’s insurance policy. In each of these insurance policies, it insures the homeowner/renter against legal liability if someone gets injured on their premises. But, both policies have a “business use” exception. This provision basically provides that if you are using your home or apartment for a business, the insurance does not apply. Thus, it is likely your insurance policy would not cover someone who was injured on your premises who rented through AirBnB. Please realize that insurance companies look for any reason to deny coverage of a claim and not cover you in the event of a claim. AN insurance company may rely on the business use exception to deny coverage for an AirBnB guest.
Next, homeowner’s and renter’s insurance consider an “insured” someone who uses the premises for residential purposes. An AirBnB guest clearly does not fall within the definition of someone who uses the premises for residential purposes. They ate merely staying as a guest for a short period of time. So, a guest would not be a covered insured and it is likely that a hosts’ insurance would not cover an AirBnB guest.
If a host is not covered, what should they do?
A homeowners’ or renters’ policy is unlikely to cover an AirBnB guest and AirBnB is not legally responsible. So, when it comes to AirBnB, it is guest beware and potentially opening up the host to personal liability. Think about it, the Hilton does not carry enters’ or homeowners’ insurance, they carry business insurance. To be protected as a host, one should have a business insurance policy. Since AirBnB does not even mention this, it is likely few hosts have this type of coverage, which means if a guest is injured, it is unlikely there is insurance coverage, and it is unlikely McCready, Garcia & Leet, or any personal injury firm would take the case.
The scope of liability coverage for AirBnB is a complicated subject and there are many nuances involving insurance coverage. But, in most cases, a host’s insurance policy will not cover a guest’s injuries. AirBnB is a great facilitator, but when it comes to liability for AirBnB, it largely guest and host beware.
If you have additional questions about AirBnB liability or general questions about an injury, feel free to contact us. All our initial consultations are free.