No matter whether you are its most ardent advocate or a fervent detractor, there can be no doubt that Airbnb has had a substantial effect on the holiday lettings market since its inception in 2008. It is surprising then that, despite its 12-year history, there are some grey areas surrounding the service.
One such area arises when considering the potential liabilities that hosts might be exposing themselves to when allowing guests to stay at their properties, specifically in situations where guests suffer personal injuries during their stay. It is a pressing matter and is one that anyone thinking of using the Airbnb service (or similar services) should consider very carefully. It is far from straight-forward.
There are three ways in which a host may incur liability for a personal injury sustained by a guest staying at their property.
The first is under common law negligence. This could cover a range of situations, however, the key test would be whether the injury was foreseeable as a result of the state of the property. An example of an act that may lead to liability under this head might be where a host leaves a nail protruding from a surface and the guest is subsequently injured.
The second way in which a host could incur liability is under contract law. Airbnb’s standard terms of service explicitly state (at clause 1.2) that “when Members make or accept a booking, they are entering into a contract directly with each other. Airbnb is not and does not become a party to or other participant in any contractual relationship between Members”. It is clear from this that any contract arising from the booking is between the host and the guest but given the limited interaction between host and guest it is difficult to say exactly what kind of liability might arise from this. Case law on this point is sparse so, unfortunately, we are yet to see real clarification of this point.
Finally, the Occupiers Liability Act 1957 (the Act) provides that lawful visitors are owed a duty of care by the owner of the property. Guests would be deemed lawful visitors for the purpose of the Act and so a host will owe a duty of care to their guests, meaning that they are required to take reasonable steps to ensure that guests will be reasonably safe during their stay. It is important to note that what is deemed reasonable will vary according to the circumstances. For example, the Act specifically makes the point that an owner should prepare for children to be less careful than adults.
It is also worth noting that section 5 of the Act will imply the common duty of care into contracts to enter/use a premises. If a contract does indeed exist between a host and a guest, it is likely that the host will, at the very least, owe this common duty of care.
It is well-known that Airbnb offers a guarantee to hosts in terms of their property whereby a host can claim compensation if their property is damaged by a guest, but it is perhaps less well-known that it also offers insurance to hosts to protect them in personal injury situations. This ‘Host Protection Insurance’ (HPI) is available to all hosts and is specifically stated to be for situations where a guest “gets hurt” or their property is damaged during a stay. HPI provides cover up to $1 million, however, as always, the devil is in the detail.
There are numerous exclusions, and perhaps the most notable are exclusions that cover situations where the injury should have been expected (which seems capable of a wide interpretation), where the injury is as a result of intoxication which the host contributed to (suggesting that hosts should be cautious of providing any complimentary alcoholic beverages), and in situations where the host has a contractual liability (as noted above the situation on this point appears far from clear). This is by no means an exhaustive list, but it should serve to illustrate that Airbnb’s HPI should not be relied upon to provide comprehensive cover.
Given the above, the cautious host may well wish to supplement this standard insurance with a more comprehensive policy. While traditional home insurance policies are unlikely to provide the required cover (at least as standard), happily a plethora of new products specifically designed to cover the Airbnb letting market are available (although as with any insurance product, it will be important to check the fine print).
What to do if a dispute arises
If you are contacted by a guest who has suffered an injury whilst staying at your property, the first thing to do would be to contact your insurer. If you have let your property through Airbnb, it is important to note that HPI provides hosts with primary liability insurance protection while hosting guests. This means that even if you have also purchased more comprehensive insurance, you should first contact Airbnb to see whether the issue will be covered under HPI (although many providers will still require you to notify them).
If the dispute escalates, many insurance products will provide cover for the costs of defending a claim, and indeed Airbnb’s HPI provides coverage for costs involved in the investigation of a claim as well as the costs of defending a formal complaint.
*Simon Painter is a property disputes partner at BDB Pitmans