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What Insurance Do I Need for My Airbnb?

What Insurance Do I Need for My Airbnb?

Does your home insurance policy cover your Airbnb rental? Would your home insurance policy cover the cost of injured guests or property damage at your Airbnb rental? It’s not likely.

As a short-term renter, you face liability risks with your Airbnb rental. You need to protect your short-term property rental with a customized insurance package for your Airbnb rental.

Your home insurer should know that you are listing your home, condo, or rental property on Airbnb, VRBO, or any other home-sharing website, or you can risk having your home insurance policy voided for breach of contract.

Listing your home, condo, or rental property on Airbnb turns your private residence into a business property.

How insurance for your Airbnb protects you

Slips and falls

One of your guests slips and falls on an icy sidewalk leading into your rental property and breaks an ankle. Your commercial general liability (CGL) insurance can help cover the cost of the injured guest’s medical expenses and help cover legal advice if you are being sued.

Cyber breaches

The security of your guests’ information and the history of their payments has been compromised after your computer has been hacked. Without cyber liability insurance, you will have to pay for the cost of restoring your system. You may also be liable for damages to third parties whose information has been stolen.


One of your guests has stolen your Airbnb unit’s TV and microwave. Commercial property insurance helps cover you for theft.

Doesn’t Airbnb already provide insurance to cover my short-term rental?

Airbnb does provide some coverage, but there is a limit. To make sure that you are protected, you’ll need to add a business insurance policy for short-term, home-sharing properties.

Note that with Airbnb, host liability insurance provides Airbnb hosts with $1 million US in coverage should you be found legally responsible for a guest getting hurt or their belongings being damaged or stolen while they’re staying at your short-term rental.

What do I need in my short-term rental property insurance package?

Commercial general liability (CGL) insurance

It’s also known as “slip-and-fall” insurance because it protects against claims alleging third-party bodily injuries, such as an Airbnb guest slipping, falling, and getting injured. This type of insurance can help provide financial coverage for third-party medical expenses and your legal fees if you are sued.

CGL insurance generally helps cover medical fees, legal expenses, and settlements regardless of the outcome of a lawsuit by an Airbnb guest against you.

It can also help protect you against third-party property damage, false advertising, and libel or slander.

Without CGL insurance, you would be responsible for paying any liability costs on your own. It’s one of the most important types of insurance that you should have for your Airbnb.

You should also consider sewer backup coverage for your short-term rental. It protects you from loss or damage to your rental property caused by the rupture or escape of water from a sewer, drain, sump pump, or septic system. Better safe than sorry.

Commercial property insurance

This type of insurance protects your Airbnb against physical losses or damages and its contents due to fire, theft, or vandalism. It typically includes coverage for the property’s physical assets such as your rental’s furniture and contents as well as any electronics that are stolen or damaged.

Commercial property insurance can also protect damage to the rental property caused by a guest, such as accidental spills or damage to the furniture, walls, or floors.

Rental income

Rental income insurance coverage provides you with protection if you lose rental income due to damages to your property because of a fire, flood, or other insured perils.

Loss assessment coverage

If you operate an Airbnb in a condo building, loss assessment coverage can help you. Since condo owners share ownership and maintenance responsibilities with others, loss assessment coverage can protect you if a claim is brought against the condominium corporation that exceeds its insurance policy limit.

Contingent unit insurance

If you own a condo or apartment, contingent unit insurance covers the gap in your condo corporation’s policy that doesn’t protect your unit, such as specific perils or events like a flood.

Cyber liability insurance

Cyber liability insurance can help cover costs associated with cybercrime involving your customers’ data after a cyber attack. If your data is compromised due to a cyber-attack, cyber insurance cab help cover the costs of notifying your Airbnb guests, and legal expenses.

Why do I need extra insurance if Airbnb provides coverage?

When you rent out your home or your basement apartment or your condo on Airbnb, it affects the coverage you need and the level of risk the insurance company is taking on. While Airbnb provides some protection, there are some gaps in coverage for which you would be responsible.

For example, you would have to keep paying the mortgage, taxes, and condo fees without any short-term rental income.

How to lower risks with your short-term rental

  • Have the proper insurance for your Airbnb rental to protect yourself and your investment.
  • If you are renting out your condo on Airbnb, make sure your condo association allows it.
  • Ensure that your Airbnb rental complies with all municipal, provincial, and federal regulations.
  • Make sure all repairs and maintenance are up to date.
  • Consider installing an alarm system.

Western Financial Group has licensed business insurance experts to get you the right insurance package for your Airbnb or short-term rental.