Here are some ways to shield yourself against liability issues that the sharing economy may expose you to.
Particularly for young people, sharing networks have ingrained themselves into our daily life for travel and necessities. According to research from 2018, millennials made up the majority of Airbnb’s clientele. More people may use these platforms as a result of the ongoing problem in the cost of living to save costs on their travel or to earn extra money by renting out their house.
Traditional hotels and automobile rental services are frequently more expensive and rigid than businesses like Airbnb and Turo (a platform for car sharing). But if something goes wrong, using them exposes you to liability concerns. Although it may be alluring to believe that you have the same rights as a consumer, this is not the case.
The UK’s 2015 Customer Rights Act protects you when you rent a car from a standard rental firm because you are entering a contract as a consumer. This ensures that you get a product or service that is secure and appropriate for your needs, as well as certain rights to returns.
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So, consumer protection laws do not apply to your rights and obligations on these platforms. The Consumer Rights Act, which only applies to business-to-consumer transactions, does not apply to either party.
This means that the platform firm is not required by law to reimburse you if you are hurt while utilizing someone else’s property or operating their vehicle. Your contract is with the other user (who is renting you their house or automobile), and it is up to them to cover your losses or injuries under the law.
In a similar vein, listing your property on a sharing website opens you up to personal liability for anyone hurt while using your property. The same holds true for property damage. As a host, you can only make claims against your guests for damage they create, not the sharing platform, and as a guest, you are completely responsible for any harm you cause to your host’s property.
Large platforms like Airbnb do provide centers for dispute resolution that coordinate these claims. By doing this, you can avoid the pressure and trouble of appearing in court on your own. Even so, there is no guarantee that you will receive a full recovery for your loss, especially if it was a sizable one.
It is also unlikely that conventional insurance will be of assistance. Most personal insurance policies forbid using insured property for business reasons, and doing so without your insurer’s consent will void your coverage. The same holds true for believing you have insurance to use someone else’s property.
In the UK, it is against the law to operate a vehicle without third-party insurance for the driver. You incur the danger of driving illegally because it’s possible that the other party won’t have commercial vehicle insurance in place to protect your driving.
In conformity with UK legislation, Turo mandates that hosts keep a current insurance coverage in place over the car at all times. Guest drivers may select one of Turo’s insurance options rather than being forced to carry their own coverage. These insurance are from a firm that is authorized and regulated by the Financial Conduct Authority, and they cover claims for car damage and third-party responsibility.
How do you know you are protected if something goes wrong when renting out your space? Shutterstock / LightField Studios
Third-party liability insurance will be required on the majority of big platforms. However, take heed to the excess amount, which may be significantly greater than your own auto insurance and may incur a surcharge for claim processing.
If you sublet a home through Airbnb, you can be breaking the terms of your lease or your mortgage. A judge determined that the tenant Airbnb host had violated the conditions of his lease by subletting it in the recent UK case of Bermondsey Exchange Freeholders Ltd v Ninos Koumetto.
Many services, including Airbnb’s AirCover for hosts and guests, provide some type of protection through their platforms. These, however, do not always cover everything, and they are not the same as insurance plans. Only losses not covered by another party, such as your home insurer or the at-fault guest, are covered by Airbnb’s host damage protection. This entails getting in touch with your insurance provider and possibly asking it to void your insurance coverage if you have been sharing without authorization.
Taking care of yourself
Currently, there is little that regulators can do to control the behavior of sharing platforms because they are mainly unregulated. On the other hand, you can safeguard yourself from unpleasant surprises if you are aware of the risks you are taking.
- Be knowledgeable about your policy
If your insurance expressly forbids commercial activity, speak with your insurer to find out more, or find a different insurer with sharing-friendly policies. This is especially crucial if you frequently utilize sharing platforms because you run the danger of becoming personally liable to your guests and losing your property insurance.
- Consider acquiring supplementary insurance
Find a policy that explicitly covers you for these actions. If you are hurt and the other party is unable to pay for your medical bills, this will safeguard you. Instead of being held personally accountable if you damage someone else’s property, you can rely on insurance.
- Examine the conditions.
Even while reading through pages of legalese may not sound pleasant, it is crucial to understand your rights when dealing with these businesses. This could be accomplished quickly by going through the FAQs on their websites or by scanning the fine print before clicking “agree” to seek for disclaimer and waiver clauses. Platforms like Airbnb provide guidance on local laws and rules for using their services.