Lowering YOUR Risk of Liability Lawsuits
Owning a short-term vacation rental property can be very satisfying, both financially and mentally. There are, however, inherent risks when you own and rent out a vacation home. In our society, lawsuits are a daily occurrence, with ads and commercials for lawyers on every TV and radio station. Unfortunately, one of the fastest-growing personal litigation areas is hospitality. As a short-term vacation rental owner, you have to consider all risks – from taxes and property damages to maintenance and customer liability. All of these can affect your profits. While you can’t prevent every accident or issue, there are steps you can take to be prepared and know what to do in the event of a liability incident.
What do I need?
First, you should have a minimum of $1 million in liability coverage. If your short-term vacation rental property is a luxury lodge, a very large property, or a property with a pool, up that limit to at least $2 million in coverage for your insurance policy. The greater the exposure – i.e. higher risk amenities – the greater the risk to YOU and the greater the potential claim from the renters – and the more homeowners insurance you need. Talk to your insurance company about your options for vacation rental insurance – and any additional coverage you may need.
Highest-Risk Areas
Street Signage
How easy would it be for first responders to find your property? Is there proper and adequate signage? If first responders can’t find your property quickly in an emergency, the delay could mean great injury to a guest.
Best practice – Make sure your property’s street number can be easily identified from the street. Use bronze or white (or whichever color contrasts best) instead of black.
Exterior Lighting
Insufficient exterior lighting can cause falls, and if that happens, you will be liable.
Best practice – Keep all exterior lights in good working condition, bright enough to safely guide guests at night as well. If there are no exterior lights (on the porch and/or pathway), install some.
Entrance Walkways + Sidewalks
Can your guests easily access the main cabin entrance when they get out of their vehicles? Do stairways have adequate lighting? Is concrete/wood in good condition?
Best practice – Try walking your property at night. Do you feel safe arriving? Take care of any issues you see as soon as you can!
Broken Trees + Fallen Branches
The Smoky Mountains area often has high wind and strong rain. Pair that with an abundance of trees all around the cabins, and you get a high occurrence of fallen trees and branches – often on or in the way of properties.
Best practice – Hire a tree expert to inspect your property and trim (or remove, if necessary) any potentially dangerous trees and branches.
Decks + Railings
A star amenity at most cabins is a nice deck for enjoying the great outdoors, but a poorly maintained one can be a major liability. Would your deck hold up to a group hanging out, including possibly jumping up and down?
Best practice – If your cabin has a wood deck, have it inspected regularly by a professional. Ensure there are no nails or screws sticking out, all wood is well sanded and treated, joists are secured with metal brackets, the railing is the appropriate height, and posts and spindles are safely spaced. Algae can also build up and cause a slipping hazard, so keeping it clean is key.
Signing for Waterfront Properties
Not every guest understands that they are swimming/wading at their own risk when staying at a property on the water, whether it’s a lake, a river, or even just a stream. Without proper signage to warn guests, it can be a liability issue.
Best practice – Ensure there are several large, easily readable signs that clearly indicate guests will be swimming at their own risk, with no lifeguard on duty or safety equipment present. Having signs inside and outside the property is best.
Stairs, Walkways, Bulkheads, and Docks for Waterfront Properties
Any walkways, stairs, or docks around waterfront properties can be fall hazards and potential liabilities.
Best practice – Have all areas around the waterfront inspected regularly by a professional (at least annually). Install non-slip pads on all stairs, check that all railing is secure, add warning signs, and ensure there is plenty of lighting along walkways.
Private Indoor + Outdoor Pools
There are many liability issues that are associated with pools! Our best practice tips include:
- Ensure outdoor pools have lockable fences surrounding them – in good condition.
- Ensure indoor pools have locks on all access doors.
- Install splash alarms and post multiple pool safety warning signs.
- Install railings so guests can easily enter and exit the pool.
- Have pools cleaned, inspected, and serviced for water quality after each guest stay.
- At least annually, have pump, heater, dehumidifiers, cleaning system, vent and HVAC, and all electrical and wiring inspected.
- Ensure all pool furniture is in great condition.
- Ensure deck is clean, has a non-stick coating, and is free of any trip hazards, nails, or loose boards.
- Ensure all float rings are in great condition, with no damages or degradation.
Hot Tubs
Along with being a slip hazard, a hot tub can bring liability issues with guest complaints about skin or health issues due to dirty hot tubs.
Best practice – Follow all water safety rules for chemicals in the hot tub, ensure the heater and all elements are in great working order, ensure filter intakes have the proper safety equipment, and keep safe use signs up and easily viewable. Have hot tubs inspected at least annually by a licensed company.
Hammocks + Porch Swings
Liability issues here include guests getting hurt from broken porch swings, exposed nails or screws, and rusty furniture.
Best practice – Ensure all hanging items are secured well and in great condition – just how you would want to enjoy them! Replace any worn out chains, ropes, wood, etc.
Deck Furniture
Guests can fall if deck seating is broken or get cut if there are exposed nails/rusty, sharp elements. Is your furniture sturdy for all guests?
Best practice – Remove any exposed screws, sand down/replace any sharp metal pieces, and replace any worn or broken seating or table. If you wouldn’t want to sit there, neither will your guests!
Sewage + Septic
While not at the top of the liability list, issues with sewage backups can cause real – and perceived – health risks.
Best practice – If your property is on a septic system, have your leach field inspected and septic tank pumped every 3-5 years (at least). If your property uses a city sewer system, check to ensure that is also regularly inspected.
Electrical Systems
Electrical issues can be a major liability! Are all your electrical boxes up to code, properly installed, and updated?
Best practice – Have a licensed electrician check your breaker boxes, light fixtures, and outlets at least every couple of years. Ensure all electrical items are properly labeled and easily readable for guests.
Fire Safety/Signage
Fires are, of course, another high-risk area. Many things around a vacation rental property could be a liability in this area.
Best practice – If you manage on your own, ensure you have procedures in place for fire safety. If you use a property management company, ensure the following items are taken care of.
- Fire extinguishers are installed, inspected, and properly maintained and displayed
- Wood-burning fireplaces are regularly cleaned and inspected
- Gas fireplaces have logs and jets cleaned regularly; regulator is regularly inspected
- Licensed professionals annually inspect for leaks
- Charcoal grills are properly placed, include a fireproof mat, and follow all local guidelines
- Gas grills are secured on a fireproof mat and include a timer on the gas line
Grill Brushes
Metal brushes can break/flake off into food if not properly cleaned and maintained, causing a liability issue.
Best practice – If you provide grill equipment, avoid metal brushes. Provide safe grill cleaners for guests and replace them regularly.
Smoke + CO Detectors
Again, anything relating to fire is a major liability and safety issue!
Best practice – Ensure batteries and sensors are regularly tested using canned smoke. Detectors should be replaced at least every 5 years.
This list may seem daunting, but almost all of these liability risks are easy fixes! Your short-term vacation rental is a business, and as with all businesses, there is some inherent risk. But with regular maintenance and a great management team, you can ensure your cabin meets best practices and is a safe space for your guests. Doing all you can to identify and avoid liabilities means a better experience for your guests and more profit for YOU. Pair this with a good homeowners insurance policy that has the proper insurance coverage for your property, and you’ll be covered!
Disclaimer: This is a summary of liability issues vacation property owners often face and is informational only. Georgia Cabins for YOU does not claim responsibility for the accuracy of fire, building, or safety codes, and information in this should not be considered legal or insurance advice. Owners should consult with licensed attorneys and liability insurance carriers for specific concerns.
