Blog Question: Can I have your thoughts on the AirBNB guarantee

Good day Allan,

Thanks so much for looking into his for me.

https://www.airbnb.co.nz/terms/host_guarantee

See attached and the link above for more information. I am interested in finding out more about the annual aggregate on the liability ‘policy’ also. Apparently this is $10,000,000 and once this is used up there is no money in the pot for further claims from airBnB hosts.  

Thanks,

Kate [surname and email provided]

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In view of the fact that this is a question originating from New Zealand I sought the help of one of our senior team, Felicity Howie who is more familiar with Insurance Law in that jurisdiction.

Felicity looked at it for me and wrote:

We have reviewed both the Host Protection Insurance Summary which was attached and the Host Guarantee Program from the link that Kate attached.

We note that the Host Guarantee Program is not insurance and does not replace the clients homeowners or renter insurance.

We cannot see any legal impediment to either of these covers being sold in NZ. In fact, our interpretation is that they would fall outside the meaning of carrying on insurance business in New Zealand as defined by the Insurance (Prudential Supervision) Act 2010. I do stress however that we are not lawyers nor do we specialise in this area.

As to disputes, both covers are silent other than in respect to disputes brought in the United States. It does however state that it will be interpreted in accordance with Section 21 of the Airbnb Terms. This states that where the country of residence is other than China or the United States, Irish Law will apply.

Lastly, we can see no mention of any aggregate limit either per policy or in total.  The document refers to a Primary Limit of Indemnity of  USD 1,000,000 each occurrence, with a total limit available per location of USD1,000,000 during the HPI Program policy term (generally an annual term).

Regards

Felicity

I am not sure that the same would apply in Australia for while it may be said to be different, and the home owner may not be paying a premium directly, they would be funding it as part of their commission structure. The use of the words Limit of Indemnity and Policy Term, I keep thinking if it sounds like insurance, it smells like insurance it most likely is insurance and the thought of having to fight ‘city hall’ in the US is not what the legislators here would like.

I therefore ran it past one of the legal and compliance experts in our Melbourne office and they wrote:

Hi Allan

I’ve searched Airbnb’s website for information related to the broker’s initial enquiry to you, set out below:

In effect, Airbnb offer their website users who are ‘member hosts’, cover for third party claims under Airbnb’s own Host Protection Insurance Program (“HPI Program”). Cover is for the host’s global legal liability for personal injury or property damage arising during a guest’s stay which was arranged via Airbnb’s platform.  The HPI Program does not cover the host’s own property, but another program called Airbnb’s ‘Host Guarantee Program’ provides this separately. Both covers are cost free, but no doubt there’s an inbuilt fee within the service fees payable to Airbnb by users of the platform.  The website has extensive Terms and Conditions for website users of course. Returning to the HPI Program, this is also described as I’ve shown and highlighted in the following important extracts from their ‘Summary’ document:

“The HPI Program provides coverage through a policy issued by certain underwriters at Lloyd’s of London, and Zurich Insurance PLC, two of the world’s most reputable insurance providers. In some jurisdictions, where a locally issued policy is required, coverage may be provided by a Zurich Insurance PLC partner company. In Japan, coverage is provided under a policy issued by Sompo Japan Nipponkoa Insurance Inc. and Aioi Insurance. This policy is subject to different terms and conditions. Please see local site for details. There is no additional cost to Hosts for participation in the HPI Program.”

…

“When does the policy begin and end?

The current term of the policy underlying the HPI Program began on December 31, 2017 and

ends December 31, 2018.”

…

“Primary Limit of Liability:

USD 1,000,000 each occurrence, with a total limit available per location of USD 1,000,000

during the HPI Program policy term (generally an annual term).”

…

“Disclaimer

This HPI Program summary does not contain the full terms and conditions, which can be found

in the policy document. A copy of the full policy will be made available on request. “

à Allan, I’ve endeavoured to access the underlying policy without ‘signing up’ but no luck. Question is whether you wish to pursue that course at this stage or not.

…

“Complaints should be directed to: Head of Quality, Marsh Ltd Tower Place London EC3R 5BU

Tel: 020 7357 1000 Email: quality.feedback@marsh.com. If you are unsatisfied with the way

that your complaint is handled, you may have the right to refer it to an external dispute

resolution service in your country of domicile. Full details of the options available to you will be communicated to you in our initial response to your complaint.”

Again there is nothing there suggesting an aggregate limit that we can see.

I hope this helps.