I received a legal summons because a guest slipped in the shower and broke their hip. They are alleging “negligence” because I didn’t have a grab bar or a non-slip mat. My insurance agent is acting shaky because I never disclosed the property was a “short-term rental,” and now they are investigating my “intent to run a business.”
Key Takeaways
- Commercial Exclusion: If your policy doesn’t know you are Airbnb-ing, a slip-and-fall claim is the #1 reason for claim denial and policy cancellation.
- Negligence vs. Accident: The lawsuit isn’t about bad luck; it’s claiming you failed to make the property safe (e.g., no bath mat, loose railing).
- Medical Payments (MedPay): A good policy has “MedPay” (
5k−5k−10k) to cover immediate bills without admitting fault. This often stops a lawsuit before it starts. - Duty to Defend: You need a policy that pays for the lawyer, not just the settlement. Legal fees can hit $50k before a trial even starts.
The “Why” (The Trap)
The trap is the “Business Activity” Clause.
A standard homeowner’s policy covers personal liability (e.g., you accidentally trip someone). It does not cover liability arising from a business. Taking money for a stay makes it a business. If you don’t have a “Short-Term Rental Endorsement” or a Commercial Policy, you are uninsured for this accident.
The Investigation: I Called Them
I compared liability responses for a “shower slip” scenario.
- Proper Insurance (Commercial CGL): They cover this under “Premises Liability.” Because it’s a commercial policy, they expect guests to be there. They emphasized their “Duty to Defend”—they hire the lawyer.
- Lemonade (Homeowners + Add-on): I asked about their “host” add-on. It provides some coverage, but the limits are often lower. The agent hesitated when I asked about “loss of earnings” if the guest sues.
- State Farm (Personal Umbrella): I asked if my $1M umbrella policy covers an Airbnb guest. The answer: “Only if the underlying policy covers it.” If the home policy denies the ‘business’ claim, the umbrella denies it too.
Comparison Table: Liability Defense
| Feature | Commercial Policy (Proper/CBIZ) | Standard Home + Endorsement | Airbnb AirCover |
| Defense Counsel | Provided | Provided (If endorsed) | Provided |
| Limit | $1M – $2M | $300k – $500k | $1M |
| MedPay (No Fault) | $5,000 – $10,000 | $1,000 – $5,000 | Varies |
| Business Intent | Fully Covered | Risk of Denial | Covered |
[IMAGE: Infographic showing the chain of coverage: Primary Policy -> Umbrella Policy -> Personal Assets]
Step-by-Step Action Plan
- Install Safety Features: Go buy non-slip mats for every tub ($20). Tighten every handrail. These are cheap fixes that defeat “negligence” claims.
- Verify Your “Liability Limit”: Do not settle for $300k. In 2026, medical costs are astronomical. You need at least $1,000,000 in liability coverage.
- Disclose the Rental: Call your agent today. If they don’t know you Airbnb, tell them. If they drop you, you needed to leave anyway.
- Check AirCover’s Status: If you have 6+ listings, remember AirCover is secondary. You need your own primary insurance to respond first.
FAQ
Does a waiver in my digital guidebook protect me?
Not really. You cannot sign away “gross negligence.” If the floor was rotted and you knew it, a waiver won’t save you.
What is MedPay?
“Medical Payments to Others.” It’s a “goodwill” payout (e.g., $5,000) for the ambulance/ER bill. It doesn’t require the guest to sue you. Using this quickly can often prevent a larger lawsuit.
Will AirCover settle or fight?
AirCover’s insurers prefer to settle quickly to keep costs down. This is usually good for you, but it goes on your claims record.