Short-Term Rental Management Insurance: Complete Coverage Guide
What is Short-Term Rental Management Insurance?
Short-term rental management insurance is a specialized policy for businesses that manage short-term rental properties on behalf of property owners. This includes professional vacation rental managers, Airbnb co-hosts, and short-term rental management companies.
Unlike standard business insurance, short-term rental management coverage is built to address the unique legal and operational risks that arise when managing short-term rental properties, which often fall into coverage gaps under traditional insurance policies.
Managing or co-hosting short-term rental properties can be a lucrative business, but operating without a tailored short-term rental manager insurance policy is a huge mistake. When you sign a contract or agree to manage or co-host someone’s property, you are legally agreeing to “bear all or much of the responsibilities” regarding that property. This includes not only the physical asset itself but also the “duty” to provide a safe premises for short-term rental guests.
Wister Insurance® created a niche insurance product to address these risks, providing commercial general liability that extends to the properties you manage or co-host, professional liability (errors and omissions), tenant discrimination, squatters, non-owned auto liability, and much more. This short-term rental management insurance guide covers everything you need to know in detail.
Coverages in a Short-Term Rental Management Insurance Policy
Commercial General Liability Insurance for Short-Term Rental Management
This is the most comprehensive liability insurance available to short-term rental managers and co-hosts. It covers liability claims for bodily injury, property damage, personal and advertising injury arising from premises, operations, products, and completed operations.
The policy pays damages the insured is legally obligated to pay due to covered occurrences during the policy term, subject to exclusions. It also includes the insurer’s duty and right to defend suits seeking such damages.
Bodily Injury Claims
This is the most common commercial general liability insurance claim in short-term rental management. It’s simply a matter of time before a guest is seriously injured at one of the properties you manage, and the manager is ultimately found liable. This could be as simple as a “slip and fall” or as complicated as a “wrongful death.”
A short-term rental is no different than a hotel and is subject to the same hospitality laws, which require the owner or management company to provide safe premises to their patrons, in this case, guests. Most of the allegations and lawsuits from guests and their attorneys surround a breach of this duty, which falls under the “tort” body of law.
If a complaint is filed seeking monetary damages because of the bodily injury, a commercial general liability policy is your first and maybe your only line of defense to not only settle the complaint, but also provide legal fees.
Property Damage Liability
Property damage coverage under commercial general liability is often overlooked, despite these claims being nearly as common as bodily injury claims. Unlike bodily injury cases, the claimant is typically the property owner or the owner’s homeowners insurance carrier—not a guest.
For example, if a manager is responsible for maintaining appliances and an icemaker line disconnects, causing significant water damage, one of two outcomes usually follows.
The property owner may file a claim with their homeowners insurer, which pays the loss and then pursues subrogation against the manager, alleging negligent maintenance.
Alternatively, the property owner may bypass their insurer and bring a direct claim against the manager for the same alleged failure.
While scenarios vary, property damage claims consistently arise from allegations that a manager’s operations caused or contributed to the loss.
Personal & Advertising Injury
Commercial general liability includes coverage for “personal and advertising injury,” which encompasses non–bodily injury offenses such as copyright infringement, false arrest, malicious prosecution, wrongful eviction, defamation, and invasion of privacy.
For short-term rental manager insurance, invasion of privacy is the most relevant exposure and can arise from both guests and neighboring property owners. Guests have a reasonable expectation of privacy, and as surveillance technology becomes increasingly accessible, privacy-related claims are on the rise. Managers should never monitor private areas, such as the interior or backyard.
Note: The Wister Insurance policy excludes surveillance of private areas but permits monitoring of clearly public, outdoor areas—such as street-facing entryways or driveway sections connected to a public street—provided the presence of such devices is disclosed to the renter.
Invasion of privacy claims from neighbors are also on the rise, often alleging that short-term rental activity interferes with their seclusion or right to quiet enjoyment of their property.
Non-Owned Auto Liability
Short-term rental managers frequently rely on third-party vendors for services such as cleaning, maintenance, and landscaping. If a vendor is involved in an auto accident while performing work on your behalf—particularly if they are uninsured—the injured party may pursue a claim against you.
For managers who use vendors operating their own vehicles, non-owned auto liability coverage is essential.
Liquor Liability
This Wister policy provides liquor liability coverage for bodily injury or property damage arising from the selling, serving, or furnishing of alcohol, provided no license or permit is legally required.
Liquor liability exposure for short-term rentals is common and often overlooked. Welcome baskets may include alcohol, and leftover alcohol from prior guests is frequently not removed during turnover. In both cases, the alcohol is considered furnished by the rental. If an incident occurs, the manager may be held liable.
Standard liability policies typically exclude liquor liability, making a dedicated enhancement—such as Wister’s—critical for proper protection.
Legal Defense Costs
Lawsuits are common in the short-term rental industry, and even meritless claims require costly legal defense. The Wister commercial general liability policy covers defense costs from the first dollar, with no deductible, and is above and beyond the $1,000,000 per-occurrence limit.
Professional Liability (E&O) Insurance for Short-Term Rental Management
Professional liability insurance protects vacation rental managers and cohosts against claims of negligence, errors, omissions, or failure to deliver promised services that result in financial loss. It covers legal defense costs and damages resulting from mistakes or oversights in professional services provided to a client.
Errors and Omissions (E&O) Coverage
Managing short-term rental properties is complex and a big responsibility, and errors or omissions are inevitable. Most E&O policies do not sufficiently cover short-term rental management exposure and were never intended to. This is why Wister developed specialty short-term rental manager insurance. There are hundreds of E&O scenarios a manager could find themselves involved in.
Diminished Property Value Protection
This coverage protects the short-term rental manager against claims of diminished property value, typically arising from poor or neglected maintenance, inadequate tenant or guest screening, tenant disputes, inadequate marketing, or failure to comply with legal requirements.
Tenant or Guest Discrimination
This coverage protects the short-term rental manager or co-host against claims of discrimination brought by current, prospective, or former tenants. Such claims may involve allegations based on factors such as race, color, gender, religion, disability, familial status, national origin, sexual orientation, pregnancy, and similar protected categories.
Contingent Bodily Injury or Property Damage
Contingent Bodily Injury or Property Damage coverage protects against claims alleging bodily injury or property damage that arise indirectly from your professional advice or actions, even when you are not directly involved in the incident.
Most errors and omissions policies exclude this coverage, leaving a significant gap for short-term rental managers, whose exposure often stems from professional services.
Legal Defense Costs
Like commercial general liability, professional liability includes legal defense coverage with a separate $1,000,000 per-occurrence defense limit built into the policy. Defense costs are covered up to this amount before reducing the $1,000,000 occurrence limit, which is standard. As frivolous lawsuits continue to rise in the short-term rental industry, robust professional liability defense coverage is increasingly essential.
Commercial Property Insurance Coverage for Short-Term Rental Management
Commercial property coverage is for direct physical loss of or damage to covered property at the premises described in the declarations page of a policy and caused by or resulting from any covered cause of loss. However, there are other coverages or add-ons that fall within the property coverage form that we’ll discuss as well.
Building Coverage
Building coverage applies when a short-term rental manager owns a building used for business operations, such as an office or warehouse, and protects against risks like fire, theft, and vandalism. If the business leases space or operates from home, property coverage is typically provided under business personal property, making building coverage unnecessary.
Business Personal Property Coverage
Business personal property coverage protects business contents, such as computers and office furniture, whether owned or leased. It also covers betterments and improvements made to leased office space or warehouses. Even for short-term rental managers who operate exclusively from home and do not lease office space, maintaining a modest business personal property limit is advisable, as the coverage applies to business laptops and other business-use items within the home.
Business Extra Expense Coverage
Business extra expense coverage applies when a business incurs additional costs as a direct result of a covered loss at one of its insured locations, such as a leased office.
E.g., if a fire damages a leased office space, the short-term rental manager may need to secure temporary office space, resulting in expenses that would not have otherwise been incurred.
This coverage applies only to locations scheduled under the commercial property coverage form and does not extend to the short-term rental properties being managed
Bells & Whistles
Every niche industry presents unique risks that require specialized insurance solutions. Yet many U.S. business policies take a one-size-fits-all approach, leaving short-term rental managers underinsured. To address this gap, Wister developed a policy specifically designed for short-term rental managers. Below are several key features worth highlighting.
Squatters Protection
Many short-term rentals also function as mid-term rentals, with guests staying 30, 60, or even 90 days. When a guest refuses to vacate and asserts squatter’s rights, the only recourse is often the court system, which can be complex and time-consuming. To address this risk, Wister offers optional squatter protection that provides up to $5,000 in legal fees to retain an attorney or qualified professional to manage the eviction process. This coverage can be critical when navigating a squatter-related dispute.
Remote Access Property Damage Liability
Remote access locks are now standard in the short-term rental industry, yet many insurance carriers exclude or deny claims arising from their distribution, maintenance, operation, or use. Recognizing that remote access technology is essential to effective short-term rental management, Wister automatically includes coverage for this exposure within the policy.
Commercial Cyber
While less common in short-term rental management than in other industries, cyber incidents can still occur. For this reason, Wister automatically includes commercial cyber coverage, which protects your business from financial losses resulting from cyberattacks, data breaches, and other cyber-related events.
Other Bells and Whistles
Additional coverages automatically included in the Wister policy include commercial crime and fidelity coverage, assault and battery, animal and pet liability, sexual molestation, employee theft, and off-premises property coverage, among others. Request a detailed short-term rental manager insurance proposal from Wister to see the full scope of protection available.
Additional Short-Term Rental Manager Insurance Policies
A comprehensive short-term rental manager insurance policy is the foundation of protecting your business, but as your operation grows, additional exposures often emerge. While Wister Insurance provides the core policy designed specifically for short-term rental management, we also work closely with a trusted partner agency to help place complementary insurance coverages that become increasingly important as your team, revenue, and operational footprint expand.
Workers Compensation Insurance
As soon as you hire employees, workers’ compensation becomes both a legal requirement and a critical risk management tool. This coverage protects your business if an employee is injured on the job by covering medical expenses, lost wages, and related costs. As your management business scales and your team grows, properly structured workers’ compensation coverage is essential to maintaining compliance and financial stability.
Employment Practices Liability Insurance (EPLI)
With employees comes increased exposure to employment-related claims, including wrongful termination, discrimination, harassment, and retaliation. Employment Practices Liability Insurance helps protect your business from the legal costs and potential settlements associated with these claims. As your organization grows and management responsibilities expand, EPLI becomes an important layer of protection for both ownership and leadership.
Commercial Auto Insurance
Short-term rental management often involves driving between properties, making supply runs, conducting inspections, and coordinating maintenance. If vehicles are titled under the business and used for business purposes, commercial auto insurance may be necessary to properly cover accidents, injuries, and property damage. As operations expand and vehicle use increases, relying solely on personal auto policies can create dangerous coverage gaps.
Excess Liability (Umbrella) Insurance
As your portfolio, revenue, and risk profile increase, so does the potential severity of claims. Excess liability insurance provides additional limits above your underlying policy limits, offering more financial protection against catastrophic losses. For growing short-term rental management companies, this coverage is an effective way to safeguard long-term business continuity.
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