Which Short-Term Rental Amenities Create the Most Liability Risk?
Amenities book properties. They also create the exposure most hosts never price in—and a lot of that exposure sits past the point where a standard policy stops covering you. Chief Sales Officer Nick Massey has spent close to a decade working solely in vacation rentals at Proper Insurance. In a conversation with Michael Friedman, CEO of Simple Life Rentals, he walked through which amenities he’d tell an owner to skip, where liability coverage ends, and the one-line test he uses to decide whether an amenity is worth the risk.
Quotes are transcribed from the video and lightly edited for clarity.
- "Does Homeowners Insurance Cover a Short-Term Rental?"
- "Does Liability Coverage Extend Beyond Your Property Line?"
- "What Amenities Should Airbnb and Vrbo Hosts Avoid?"
- "How Do You Decide Whether an Amenity is Worth the Risk?"
- "Can STR Hosts Offer ATVs, Golf Carts, or Motorized Watercraft?"
- "Does a Short-Term Rental Need Safety Signage?"
- "What Happens to Rental Income if the Property is Shut Down After a Claim?"
- Start With What Your Current Policy Actually Reaches
“Does Homeowners Insurance Cover a Short-Term Rental?”
Homeowners policies don’t typically cover vacation rentals, and not for the reason most hosts expect. Standard Homeowners and Landlord policies carry a business activity exclusion, and the contract defines what counts as a business—the host doesn’t. Once rental income crosses that definition, a carrier can decline nearly any claim on the property.
Nick Massey, Chief Sales Officer
The biggest question I think every property owner needs to ask themselves is, “Is this a business or not? “For some of us, this may be I just want to cover my expenses. For some of us, it is a revenue or profit center for us in our overall investment portfolio. The standard retail insurance markets on your regular standard Homeowners policy, and even your Landlord-type insurance built for second homes and/or longer traditional leasing, have a business activity exclusion. So, it doesn’t just come down to what your definition of a business is, but what does that insurance contract define as a business? And if you don’t have the right policy, there’s a claim, they come in and go, ‘Well, you’re making more than X amount of dollars, which is now a business defined in our contract’—you can have virtually any claim declined.”
That definition is set by the contract, not by the host. It’s the reason short-term rental insurance is written as commercial coverage rather than as an endorsement bolted onto a residential policy—and it’s why the liability questions below have different answers depending on which kind of contract you hold.
“Does Liability Coverage Extend Beyond Your Property Line?”
“From a liability standpoint, are you protected just on your premises address, or does your liability extend beyond that property line? So once we start talking about amenities — be it lakefront, beach access, river access, I provide bicycles, on and on, a golf course, whatever it might be—these premises liability policies, once a claim happens beyond your property line, you’re not protected anymore, because it’s a limitation of that type of policy. And that’s the beauty of the commercial-style liability protection: it extends beyond the property line.”
Nick Massey
This is the distinction that decides most amenity claims. A premises liability policy answers for what happens inside the lot lines; the Proper Policy includes Amenities On & Off Premises, which follows the guest to where they actually use the bikes, kayaks, or beach access. Nick’s dock example makes the stakes concrete: in many jurisdictions, the property line stops at the high-water mark, so a dock is already off premises.
“What Amenities Should Airbnb and Vrbo Hosts Avoid?”
Nick Massey
“It’s becoming a little bit more widely known that any type of inflatable amenity should just be foregone at the property. People just don’t really know and understand how to operate them when there’s a problem. So I’m based out of Montana. We all have inflatable river rafts. We go fly fishing and we take our families out. We know how to manage a multi-chamber inflatable watercraft if something goes wrong.
The problem is, people who don’t have that experience don’t know what to do. So you really want to stick to hard-sided watercraft. You want to stay away from inflatable paddle boards. I understand they’re super convenient, but you really want to have the hard-sided or foam ones, ones that don’t inflate. And the reason for that is because cracks and chips are easily identifiable.”
“The other things to really avoid are going to be things hanging from trees. While you might be a lakefront property and a hammock sounds nice, let’s not wrap that around a tree. We don’t know what that tree is going to do in any type of storm. Make sure you get just a nice sturdy metal apparatus to hang that in. Same goes for swings. We all love rope swings. A lot of us probably grew up with rope swings. It’s not the 80s anymore, so people get extremely litigious. Make sure that swing again is either hanging from an apparatus or something highly structural.”
Nick Massey
Damage you can see is damage you can take out of service. That’s the underwriting logic behind the hard-sided preference—a cracked kayak is visible on a routine property walk; a failing inflatable seam is not.
“How Do You Decide Whether an Amenity is Worth the Risk?”
Nick Massey
“The typical rule of thumb here for me is if it’s not a searchable amenity on the traditional OTA—Airbnb, Vrbo, Booking.com—you probably shouldn’t be offering [it] at your property, because you’re not increasing visibility. I can’t go in and search on Airbnb or Vrbo for a diving board at a pool. I can search a pool. But I can’t search a diving board. Let’s just avoid the risk altogether.”
If a feature can’t be filtered for, it isn’t winning bookings—it’s only adding exposure. That test resolves most amenity questions before an insurance conversation is needed at all.
Whether your guests are traveling via golf cart, paddleboard, bicycle, or by foot, get comprehensive coverage that follows the experience you’re providing.
“Can STR Hosts Offer ATVs, Golf Carts, or Motorized Watercraft?”
“It’s really important that if we are offering watercraft, it’s self-powered watercraft only and it’s not motorized. So a home policy is meant for a physical structure, and then liability involving the usage of any type of motorized vehicles or watercraft are not covered.”
“We don’t want to be offering any type of motorized equipment to our guests. Now, people bringing their own—that’s fine. Now, if you have some acreage and you have a little trail system on your property, or access to a trail system for ORVs, could you be held liable for an injury on your property when a guest is using their own ATV? Sure. If there’s a way for them to prove you’re negligent in their injury.”
Nick Massey
Guests bringing their own equipment shifts operation to them, but it doesn’t retire the host’s exposure—negligence on the property is still in play. Periodic walkthroughs and documented repairs are what close that gap. Commercial General Liability coverage (CGL) is what responds when a guest injury claim does land.
“Does a Short-Term Rental Need Safety Signage?”
Nick Massey
“One thing that was told to me a long time ago by a personal injury attorney was you can’t waive negligence. So if you think it’s a good idea and you decide not to put it in place—if you’re getting deposed by a lawyer and they go, ‘Well, did you ever think about putting up a no lifeguard on duty or swim at your own risk line?’ You’re like, ‘Yeah, I did, but I didn’t think it was necessary.’ Boom. Negligence.” One of our fundamental requirements if you do business with Proper is we’re going to tell you, ‘Hey, you’ve got to put up that sign.’ We put a photo in the file. Now we have “Exhibit A”, if you will, in a liability claim—that’s like, there was a sign and rescue equipment and a waiver of liability about using the waterfront at your own risk. How is our property owner, and by de facto property manager here, negligent in your injury?”
Signage, rescue equipment, and a documented rental agreement aren’t paperwork for its own sake—they’re the file a claim gets defended from. Photographing them at onboarding is what turns a requirement into evidence. Nothing here is legal advice; how a court weighs any of it varies by state.
“What Happens to Rental Income if the Property is Shut Down After a Claim?”
“Last but not least is your loss of revenue in the event of a property claim. You’re making money. You’re hopefully paying down debt. You’re using this money to pay for kids’ college tuition, whatever it might be. If your property gets shut down, how is that revenue replaced on the contract? And the gross revenue side is going to be the best, because it’s paying top dollar on those lost or canceled bookings due to a covered property claim.”
Nick Massey
Loss of Business Revenue is the coverage that answers this, and the measure matters: gross revenue pays on the booking value that was actually lost. Read the definition in your own contract before you need it.
Start With What Your Current Policy Actually Reaches
Most amenity claims don’t turn on whether a host was careless. They turn on whether the contract extended beyond the property line and whether the amenity was ever worth offering. Pull your current policy and check two things: where liability stops, and how lost revenue is measured. If either answer isn’t in writing, that’s the conversation to have before peak season, not after a claim. Our team will walk through your current coverage with you—call 888-631-6680 or verify your insurance.
