In 2017, North Carolina residents who rented out their homes, apartments, or living spaces, through Airbnb made roughly $97 million. In Charlotte alone, residents made over $8.7 million using the popular short-term rental service. The business model of Airbnb is fairly simple—the company uses a house-sharing model that allows users to offer their homes, apartments, or private rooms to guests-renters as an alternative to local hotels, or the like. With this platform, private citizens can use Airbnb as an intermediary to provide professional services.
The concept of Airbnb is rewarding for private individuals who wish to open up their living space as a host because they can generate income, while also benefiting guest renters looking for affordable lodging rates because the low overhead costs allows for rates to be significantly cheaper than hotels. However, the downside of using Airbnb is determining liability in the event of an injury. In most situations, the Airbnb hosts will post pictures of their living space so interested parties can see the property they are considering to rent. In large part, pictures and reviews are what potential guest rely on when choosing to rent from a particular host. This creates an issue if the images posted are picturesque but the true conditions of the premises pose an increased risk of harm to guests. For example, photographs of a beach house may give the appearance that the property is in great condition, with no visible dangers, but upon entry of the premises guest unwittingly find that the stairs are wobbly or there is a loose ceiling fan. These sort of latent defects can put guest in danger of severe injuries.
Ordinarily, dangerous conditions and defects on an owner or occupant’s land falls under premise liability, a subset of the doctrine of negligence. Premise liability claims arise when owners or occupants of land fail to uphold a standard duty of care to those entering their premises. This standard is intended to protect entrants from conditions that create a risk of harm. Under the general rule, an owner or occupant of land or a building maintains a duty to warn of or make safe any known conditions that are nonobvious and dangerous to any guest. In contrast, the landowner of the premises owes nothing to undiscovered trespassers.
Therefore, in a premise liability case involving a hotel injury, if someone is injured while on the hotel premises, it is likely that the hotel can be held liable for the injuries suffered, absent any other extenuating circumstances. When dealing with Airbnb, however, there may be up to three parties to deal with in the event of an injury—the homeowner, Airbnb, and/or the property landlord.
In a typical case, a homeowner would likely face liability for injuries suffered on their property, however, their homeowner’s insurance may have limitations that exclude coverage if the homeowner is using the property as a bed and breakfast for profit (such as Airbnb)—often requiring the homeowner to carry additional insurance. Airbnb offers what is called “Host Protection Insurance,” which provides hosts with liability insurance of up to $1 million to protect against third-party claims for personal injury or property damage. Originally, the Host Protection Insurance was only offered as secondary insurance, requiring the claim to be brought before the host’s homeowner’s insurance as a condition precedent to filing a claim with Airbnb’s Host Protection Insurance. Due to the increased risk of homeowner’s insurance companies canceling insurance coverage because homeowners were using the property for “profit,” and the increased premiums resulting from claims, Airbnb now offers the Host Protection Insurance as primary coverage. Despite that, Airbnb’s insurance coverage contains a number of key exclusions, such as “intentional acts including assault and battery or sexual abuse or molestation—by the host or other insured party; loss of earnings; personal and advertising injury; fungi or bacteria; Chinese drywall; communicable diseases; acts of terrorism; product liability; pollution; and asbestos, lead, or silica.”
Further, even if the injuries are covered by the Host Protection Insurance, $1 million may not be sufficient to cover your losses. For instance, brain injuries and extensive hospital stays, or even surgery, may be quickly exhausted and leave the victim in financial turmoil as a result. Even worse, if the homeowner is not carrying additional insurance, the injured party may face even greater difficulty if they attempt to seek compensation for their injuries.
Matters become even more complex when the Airbnb host is renting the premises from a landlord themselves. In this scenario, renting out the premises to an Airbnb guest may be in direct violation of the landlord/tenant agreement, which then could leave the Airbnb guest with no means of recourse, and may even result in the tenant facing eviction. Similar to the homeowner’s insurance, the renter’s insurance may not provide coverage to third-party injuries so the tenant would need to have additional insurance coverage when using Airbnb’s services.
When it comes to holding Airbnb itself liable, the rental service company attempts to avoid liability under their “Disclaimer” clause in the “Terms and Conditions” by stating “if you choose to use the Airbnb Platform or Collective Content, you do so voluntarily and at your sole risk. The Airbnb Platform and Collective Content is provided “as is”, without warrant of any kind, either express or implied.” As such, agreeing to use Airbnb’s service effectively means “you choose to assume those risks voluntarily.” Agreeing to such terms may create challenges for someone seeking recovery for damages, however, a skilled attorney may be able to address issues in the company’s terms and conditions that are not enforceable. As a result, Airbnb may be forced to assume greater liability or increase their coverage for personal injury claims.
If you or a loved one are injured in connection with Airbnb’s rental services, contact the skilled attorneys at Rosensteel Fleishman, PLLC to review your case. The initial consultation is free.