Airbnb Business Insurance
Getting insurance for your Airbnb business is essential.
Airbnb businesses need to be protected from a variety of different risks, such as personal injury claims that arise as a result of a guest accidentally injuring themselves within your property.
Property damage claims can also come into play, both in relation to your own commercial properties and in relation to a guest’s personal belongings.
We’ll help you find the most personalized and affordable coverage for your unique business.
Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.
Best Insurance for an Airbnb Business
General liability insurance is — generally speaking — the most/one of the most important insurance policies for Airbnb businesses.
Some of the risks general liability insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
The unique risks faced by Airbnb businesses can extend beyond the scope of standard general liability insurance. For this reason, other forms of coverage may be needed:
- Commercial property insurance: To cover the cost of replacing or replacing items in the event the property is damaged.
- Cyber liability insurance: To cover any lawsuits filed by guests if the information you have stored on them is compromised.
- Home-based business insurance: To cover any work-related accidents at home that are not covered by your homeowner’s insurance policy.
When looking for an insurance provider for your Airbnb business, you have two broad categories available to you: traditional (e.g., Hiscox) and online providers.
Even though both come with different benefits, online insurers are generally recommended for most small business owners because they offer tailored coverage at a more affordable rate.
This is because of the lower overhead involved.
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Cost of General Liability Insurance
The average Airbnb in America spends between $350-$700 per year for $1 million in general liability coverage.
Compare the average cost of general liability insurance for an Airbnb business to other professional industries using the graph below.
Several factors will determine the price of your policy. These include your:
- Location
- Deductible
- Number of employees
- Per-occurrence limit
- General aggregate limit
You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy.
A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.
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Discover the best coverage at the lowest rate in our cheapest business insurance review.
Common Situations That General Liability Insurance May Cover for an Airbnb Business
Example 1: A guest slips and falls while taking a shower in your rental. He sustains injuries and decides to take legal action against you to cover his medical bills. The general liability insurance policy you carry will pay for the cost of hiring an attorney and any settlement that you may wind up paying, up to your policy limits.
Example 2: A clogged gutter causes water to pool on the walkway to the house, which then freezes into an ice sheet during winter. A guest is bringing groceries inside the rental when she slips on the ice, falls, and sustains injuries. She files a lawsuit against you. Your general liability coverage will pay for your legal defense costs and the cost of a settlement.
Example 3: A section of asphalt in the driveway of your rental is washed away in a storm. A guest fails to see the damage and rides his very expensive racing bicycle into the damaged area, which bends the front wheel. Your general liability policy should cover the cost of repairing the broken bike.
Other Types of Coverage Airbnb Businesses Need
While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some of the most common types of coverage:
Cyber Liability Insurance
Any information you keep related to your guests could be compromised by cybercriminals. If the information is stolen, guests could decide that you are responsible for the damage caused by the compromised information, and they could take legal action against you. Cyber liability insurance is designed to help cover the costs of hiring an attorney and any settlements that you wind up paying guests, up to your policy limits.
Commercial Property Insurance
If your commercial property is damaged, such as in the event of a fire or a major storm, repairs are likely to be expensive. A commercial property insurance policy will help to cover the cost of repairing the damage and replacing what needs to be replaced. With this kind of policy, you can get your rental fixed up and get back to renting the property out to guests.
Home-Based Business Insurance
If you run your Airbnb rental business from your home, there is a good chance that your homeowner’s insurance policy will not cover accidents related to your business. A home-based business insurance policy will ensure that you have more-comprehensive coverage, helping to pay for the cost of damage resulting from business activities.
Commercial Umbrella Insurance
During certain situations, like expensive lawsuits, the limits on your general liability insurance may be exhausted. Instead of needing to pay the extra costs out of pocket, you can carry a commercial umbrella insurance policy. The umbrella policy will pick up where the general liability policy leaves off. Once the general liability limits are reached, the umbrella insurance will begin to pay up until the point where its limits are reached.
Additional Steps To Protect Your Business
Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.
Here are several things you can do to better protect your Airbnb business:
- Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
- Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
- Stay up to date with business licensing.
- Maintain your corporate veil.
Airbnb Business Insurance FAQ
Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.
A typical business owner’s policy includes general liability, business interruption, and commercial property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.
"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.
In most cases, some forms of business insurance will be necessary if you want to be compliant with local regulations. For instance, in many states, businesses with more than a certain number of employees must carry workers’ compensation insurance.
However, even if you may not be legally required to do so, getting the best possible Airbnb business insurance is still highly recommended because of how risk-prone the industry can be.
Not necessarily. Certain exceptions may be written directly into your Airbnb business insurance policy, and some perils may be entirely uninsurable.
Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.
An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.