$1,000,000 through Lloyd’s of London.
While this is substantial coverage, each
host or landlord should determine if
$1,000,000 is sufficient. The risks around
the property as well as the financial condition of the guests should be considered.
The coverage also excludes some items
that may represent a substantial gap in
protection. For example, the coverage
description states that the “program does
not apply to liability arising from (1)
intentional acts including: (i) Assault and
battery or (ii) Sexual abuse or molestation
— (by the host or any other insured party),
( 2) Loss of earnings, ( 3) Personal and
advertising injury, ( 4) Fungi or bacteria,
( 5) Chinese drywall, ( 6) Communicable
diseases, ( 7) Acts of terrorism, ( 8) Product
liability, ( 9) Pollution, and ( 10) Asbestos,
lead or silica.”
Let’s take a few of these exclusions to
examine the potential exposures (see table below).
Owners should also be aware that their own Homeowners coverage may not apply if they are exchanging or leasing
their property. Even if it did, there are many exclusions that
may also prevent them from having the coverage they need.
Homeowners insurance and Commercial Property insurance
are constantly evolving, with new exclusions and conditions
There are a number of potential risks in providing these ser-
vices, too many to be covered in-depth here. Some of these
“service-sharing” apps are opportunities to provide owners or
drivers with additional income or ways to swap with others
to allow travel to areas that may otherwise be unaffordable.
However, it is wise to be cautious and ensure that this extra
income or property-swapping event does not turn into an in-
cident from which you can never recover.
Gary Jennings, CPCU, ARM, is the principal consultant at
Strategic Claims Direction LLC. He may be reached at Gary.
Exclusion Wording PotEntial gaP
(1) Intentional Acts including:
(ii) Sexual abuse or
molestation — (by the host
or any other insured party)
If you are the landlord but a property lessee exchanges the property with or without
your permission, what is your exposure if a guest is sexually abused or molested by
a lessee or someone they hire to provide services (e.g., caterer, housekeeper)?
( 2) Loss of earnings A guest sustains a significant injury and is unable to work for a long period or unable
to work for the remainder of his/her life. What is your exposure for loss of earnings?
( 4) Fungi or bacteria A guest is exposed to bacteria while staying in the property that causes an illness.
What is your exposure?
( 5) Chinese drywall You may or may not know if Chinese drywall is in your property. What is your
exposure if it is found to be in your property?
( 6) Communicable diseases A guest is exposed to a communicable disease while staying at your property even
though no one was aware of it at the time of exposure. What is your exposure?
( 7) Acts of terrorism This is not something we thought much about until recently. What if your guests
were injured or killed in a terrorist attack even though you thought your property
was in a safe area? While you would argue that you had no involvement in the
terrorist attack and should have no liability, the guest(s) could argue that your
security was inadequate and they were injured in a terrorist attack due to that
security failure. What is your exposure?
only provides coverage
up to $1 million for