In a horrific story published Sunday in the online magazine Matter, writer Zak Stone told the story of the death of his father while a guest at an Austin cottage rented through the “home sharing” website Airbnb. This story, and others like it, highlight the safety and liability risks of the largely unregulated “sharing economy” that has grown up around Silicon Valley startups like Airbnb and Uber.
According to Stone’s article, Stone’s father found the cottage through an Airbnb listing that included photos of a charming rope swing hanging from a tree. What the photo did not reveal, however, is that the tree had been dead for two years. When Stone’s father sat on the swing, the tree snapped in two, falling on his head and mortally injuring him.
Unlike hotels and resorts, properties rented through Airbnb are typically apartments, houses, or even just spare rooms rented out from time to time by their owners or tenants for some extra income. They not generally subject to the same regulations, inspections, and safety standards as the traditional hospitality industry.
In addition, until recently, Airbnb hosts were often uninsured. While hosts were instructed to check their homeowners or renters insurance policies to make sure their liability coverage was valid if they rented their rooms, few did so. Those that did learned that most homeowners and renters insurance policies exclude liability for home-based commercial activities and rentals. Some even saw their homeowners insurance cancelled when their insurance carriers learned of their rental activities, which insurance companies see as greatly increasing their exposure to liability. If a guest was injured in the home of an uninsured host, the guest might be left with little recourse to seek compensation other than to sue the host and recover against the host’s personal assets, including the home itself in states without a robust homestead exemption like Texas’s.
In January of this year, however, Airbnb added a “Host Protection Plan” which provided $1 million in liability coverage secondary to hosts’ homeowners or renters insurance policies. In October, these plans changed to provide primary coverage. However, even with these plans in place, Airbnb hosts should be aware that they are still personally liable if guests are injured by dangerous conditions on their property, and the $1 million policy may not cover all of the guest’s damages, especially in cases like Stone’s that involve catastrophic injury or death.
The peer-to-peer “sharing economy” as a business model has been developing rapidly in the last decade, with companies like Airbnb and Uber progressing from obscure Silicon Valley curiosities to multi-billion-dollar global businesses seemingly overnight. Courts, governments, and regulators have been slow to keep up, with peer-to-peer companies often operating in legal gray areas-or sometimes just plain illegally-in many parts of the country. In fact, “sharing economy” businesses often resist submitting to regulation, not the least because these businesses can derive a powerful competitive advantage by avoiding regulations, permit fees, and taxes that burden traditional providers of the same services, such as taxi companies and hotels.
If you or someone you know has been injured in a slip-and-fall or other accident, contact an attorney at Abraham, Watkins, Nichols, Agosto, Aziz & Stogner by calling 713-396-3964 or toll free at 800-594-4884.