Unfortunately, we live in a litigious society. Ads for lawyers bombard TV and radio for everything from auto accidents to medical malpractice, but one of the fastest growing areas of personal litigation is hospitality. Owning a short-term vacation rental property can be fun and rewarding; however, as with any business, many things - including taxes, maintenance, guest damages, and customer liability - can affect your bottom line. You can plan for these challenges, but only if you know what to look for and what actions to take.
You can never eliminate all property risk, so to start you should have a minimum of $1 million of liability insurance coverage. If you own a large lodge or property with a pool, up the limit to at least $2 million. The greater the exposure, the greater the risk - and the greater the potential claim.
Areas of Highest Risk Possibility
Street Signage - Consider how easy or difficult it would be for first responders to find your property. If they can’t find it in an emergency, the delay could cause your guest greater injury.
Best practice: Ensure your house number is easily seen from the street. Replace black numbers with bronze or white (if they contrast best).
Exterior Lighting - If a guest falls near your main entrance because of insufficient exterior lighting, you can be held liable.
Best practice: Ensure all exterior lights - including for driveway, sidewalk,walk, etc. - are working properly. If there are none, install some.
Entrance Walkways | Sidewalks - Do your guests have easy access to the main entrance from their vehicles? Are stairs well lit, railings secure, and concrete in good condition?
Best practice: Go to your property at night and try walking up to the entrance. Address any issues you see as soon as possible!
Broken/Falling Trees & Branches - The area (East Tennessee Smoky Mountains) often has high winds and inclement weather, causing a high number of fallen trees and branches. This can cause power outages, damage the cabin, or injure guests. This refers to compromised or diseased (not healthy) specimens. If you know a tree on your property is not safe and do nothing, you are liable.
Best practice: Have a tree expert inspect and trim or remove (if necessary) any trees or branches that may cause harm.
Decks & Railings - If your property has a wooden deck, consider its condition. If you’ve seen stories of groups falling because of poorly maintained or constructed decks that fell, you know that is a serious situation you want to avoid.
Best practice: If you jumped up and down on your deck, would it hold up? Have a professional ensure your deck is secure, which means nails and screws aren’t sticking out, joists are secured with metal brackets (not nailed together), the railing is the right height, and posts and spindles are properly spaced. Also have your deck cleaned for algae regularly so it does not become a slipping hazard.
Waterfront Property | Signage - Not all guests understand they are swimming at their own risk when they stay at waterfront properties, whether it be lakes, rivers, or streams. This can cause a liability issue without proper signage.
Best practice: Put up several (large, easily viewable) signs that clearly state guests swim at their own risk, with no lifeguard or safety equipment present. Signage inside and outside the property is best.
Waterfront Property | Stairs, Walkways, Bulkheads, or Docks (floating or permanent) - If your property has a dock or walkway to the water, it can be a fall hazard if not properly maintained.
Best practice: Regularly have this inspected (at least annually) and ensure you have non-slip pads on stairs/decking, working lighting along walkways, secure railing, and warning signs.
Private Indoor/Outdoor Pools - The list could go on and on, so here are some tips for primary concerns:
- For outdoor pools: ensure it has a lockable fence (in good condition) surrounding it.
- For indoor pools: ensure it has a lock on all access doors.
- Install splash alarms.
- Post multiple and standard pool safety warning signs.
- Install railings for easy entrance and exit to and from the pool.
- Have pump, heater, cleaning system, dehumidifiers, vent systems, HVAC, and all electrical/wiring inspected at least annually.
- Have pool cleaned, inspected, and serviced for water quality after each guest stay.
- Replace broken or worn out pool furniture.
- Ensure deck area is free of screws, nails, or any trip hazard. Non-stick coating helps!
- Inspect float rings often to ensure they aren’t damaged or degraded.
Hot Tubs - Guest complaints about skin or health issues because of dirty hot tubs or injuries and burns from broken hot tubs can be a liability.
Best practice: Ensure water safety rules (for chemicals) are met, the hot tub is in working order (including the heater), filter intakes have proper safety equipment installed, and that safety signage is present and easily visible/understandable. Hot tubs should be inspected at least annually by a local (and licensed) company.
Porch Swings & Hammocks - Guests can fall from broken porch swings or worn out furniture or get cut by exposed nails, screws, or rough boards.
Best practice: Ensure anything hanging is secured and in good condition, replacing anything worn or old.
Porch/ Deck Furniture - Guests falling on an old deck chair or getting injured by exposed nails is a huge liability. Consider whether your furniture is sturdy - for all guests.
Best practice: Fix or replace any broken or worn seating and tables, including any exposed screws, nails, or sharp metal pieces.
Sewage & Septic Issues - While rare, sewage backups can cause real and perceived health issues.
Best practice: If you’re on a septic system, have your tank pumped and leach field inspected at least every 3-5 years. If you’re on a city sewer system, ensure that is checked as well.
Electrical Systems - If light fixtures, wiring, or any boxes are outdated, improperly installed, or not to code, you can be liable for damages or injuries to guests.
Best practice: At least every couple years, have a licensed electrician check light fixtures, breaker boxes, and outlets to ensure they aren’t burnt, outdated, or not up to code. Ensure everything is properly labeled and easily readable as well.
Fire Safety - Fires can be caused by many things and are a huge liability for owners.
Best practice: Have fire safety policies and procedures in place; if you don’t self manage, check that your third-party manager has them. They should cover:
- Fire extinguisher installation, inspection schedule, size, location, and type
- If wood burning: How often is it cleaned and inspected?
- If gas: How often are jets and logs cleaned? What about the regulator?
- Fire safety: annual inspections for operation and leaks
- For charcoal grills: location, fireproof mat, proximity to combustible materials (sides, walls, deck ceilings, etc.); best location is on driveway or yard (not on deck)
- For gas grills: secured on fireproof mat, timer on gas line to ensure it’s not left on
Grill Brushes - If you provide this tool for guests, ensure it’s not a safety liability. Metal brushes can flake off in food, causing injury.
Best practice: Provide safe and effective alternative grill cleaners for guests. Avoid all metal brushes.
Smoke/CO Detectors - Malfunctioning or old detectors can be a major fire hazard and a huge liability for owners.
Best practice: Regularly test batteries and use canned smoke to ensure sensors work. Replace all every 5 years.
Almost all of these are easy fixes that can save you a lot in liability! Remember that your short-term vacation rental property is a business, and with that comes some liability exposure. Doing everything you can to mitigate it means more profit for YOU and a better experience for your guests!
Disclaimer: This is a summary of liability issues vacation property owners often face and is informational only. Cabins for YOU does not claim responsibility for 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.