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Share and Share Alike: Risk Allocation in the “Sharing Economy”
Kimberly B. Reevesi
Airbnb is one of the most widely known examples of the “sharing economy” and it provides
a lens with which to view many of the legal issues raised by the sharing model.1
Airbnb and
similar services allow users to share anything from a single room in an owner-occupied home to
an entire farm, condo, or apartment. There are also platforms that allow individuals to share cars,
designer handbags, bikes, tools, or virtually anything else that you can think of.2
Websites like
Rover and DogVacay are a sort of hybrid between the so-called gig economy, where users rent out
services, and the sharing economy where users rent out tangible goods.3
In addition to matching
“hosts” with dog owners to provide boarding, these sites also allows users to find a dog walker,
daycare provide, or house sitter.4
It is no coincidence that the sharing phenomenon emerged in 2008 and 2009, the peak of
the Great Recession.5
Although Airbnb and related services are touted as making use of otherwise
“underutilized” assets, such services are also intended to serve as a means to supplement income
(although there are many critics).6
These services have been hailed as “disrupters” that have
increased competition in the marketplace, driving down prices for consumers.7
i
J.D., summa cum laude, Georgia State College of Law, 2013, attorney, Carlock, Copeland & Stair, LLP.
1
Peer-to-Peer Rental: The rise of the sharing economy, Mar. 9, 2013, The Economist,
http://www.economist.com/news/leaders/21573104-internet-everything-hire-rise-sharing-economy
2
See id.
3
Erik Sherman, Uber, TaskRabbit And Sharing Economy Giveth to Workers, But Also Taketh Away, Aug. 4, 2015,
Forbes.com, http://www.forbes.com/sites/eriksherman/2015/08/04/the-sharing-economy-giveth-to-workers-but-boy-
can-it-taketh-away/#7b8c3da92044
4
https://www.rover.com/; https://dogvacay.com/.
5
Peer-to-Peer, supra note1.
6
Sherman, supra note3; see also Adam Chandler, What Should the ‘Sharing Economy’ Really be Called?, May 27,
2016, The Atlantic, http://www.theatlantic.com/business/archive/2016/05/sharing-economy-airbnb-uber-
yada/484505/.
7
Peer-to-Peer, supra note 1.

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As with any radical innovation, regulatory and insurance regimes have had difficulty
reacting and adjusting to these new models. In the traditional hospitality sector, Georgia imposes
special taxes and the Department of Public Health and Safety promulgates regulations to ensure
the public is protected.8
Traditional hotels receive permits to demonstrate compliance with state
regulations.9
Traditional pet trainers and boarding kennels are licensed through the Georgia
Department of Agriculture.10
There are also municipal licenses and building codes, which like the
foregoing state requirements, most peer-to-peer users are unlikely to comply with.11
Moreover,
most traditional hotels or boarding kennels would have some form of commercial liability
insurance, or be self-insured with an excess policy in place, to compensate the public in the case
of injury, property damage, or other loss.12
Part of the underwriting process generally involves
assessing and informing owners of potential risks to decrease the chance that a loss will occur.
The insurance industry has been slow to adapt and most conventional consumer insurance products
do not cover these endeavors.13
Allstate currently appears to be the only major insurance carrier
to offer a product that specifically covers short-term rentals like Airbnb.14
The Georgia House of Representatives assembled a committee to study short-term rentals
in Georgia.15
The committee’s report noted that the short-term rental community “welcomed fair
8
See O.C.G.A. §§ 31-2A-6; 31-28-1, et seq.
9
O.C.G.A. § 31-28-2.
10
See http://www.agr.georgia.gov/kennel.aspx.
11
Savannah law requires short-term rental properties such as Airbnb to obtain a $150 license and to remit a 6% local
hotel/motel tax and a 7% State Sales and Use Tax on a monthly basis. Savannah, Georgia Code of Ordinances, Chap.
11, Short-Term Vacation Rentals, available at http://savannahga.gov/DocumentCenter/View/4303. Part of the
licensing process requires certification of compliance with zoning ordinances as well as a minimum safety guidelines.
See http://www.savannahga.gov/stvr. Atlanta does not appear to have any similar laws on the books.
12
The only business liability insurance that is mandatory in Georgia, however, is workers’ compensation insurance if
the business has three or more employees, although some licenses may require proof of insurance. See O.C.G.A. § 34-
9-2(a)(2). Auto liability is also mandatory. O.C.G.A. § 40-6-10.
13
Ron Leiber, The Insurance Market Mystifies an Airbnb Host, Dec. 19, 2014, NY Times,
http://www.nytimes.com/2014/12/20/your-money/the-insurance-market-mystifies-an-airbnb-host.html.
14
https://www.allstate.com/home-insurance/host-advantage.aspx.
15
Georgia House of Representatives, House Study Committee on Short-Term Rental Providers, Rep. Terry Rogers,
Chairman, available here:

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and basic regulations including insurance requirements, basic safety requirements . . . and
occupancy limits.”16
Ultimately, however, the committee did not recommend any new legislation.
Instead, it noted that regulation should occur at the local level. The committee did make a series
of recommendations, but these recommendations were primarily concerned with the collection of
tax revenues.17
As the Committee noted, this new peer-to-peer model lacks the traditional safeguards
embedded in the regulatory and insurance schemes.18
Instead, properties and dog sitters are only
vetted through social media and user reviews.19
The growth in the sharing economy suggests that
this system largely works; however, in the event something does go catastrophically wrong, there
may not be insurance in place to cover such a loss.20
The injured consumer may find herself
without any recourse to cover property damage or personal injury. In turn, the Airbnb or
DogVacay host is exposed to personal liability that may far exceed the financial gains from such
services.21
The standard homeowner’s policy provides a broad base of coverage in exchange for a
relatively low premium. A typical policy provides coverage for physical damage to the house, any
connected structures, and for personal property. Such policies also provide coverage for liability
and medical payments. However, in a traditional homeowner’s policy there is no liability coverage
for bodily injury or property damage “[a]rising out of or in connection with a ‘business’ conducted
http://www.house.ga.gov/Documents/CommitteeDocuments/2015/ShortTermRental_FINAL_REPORT.pdf
16
Id. at 3.
17
Id. at 4-5.
18
See id. at 3.
19
See Peer-to-Peer, supra, note1.
20
E.g., Galen Hayes, The Scary Insurance Reality for Airbnb Hosts, Jan. 5, 2016, Property Casualty 360°,
http://www.propertycasualty360.com/2016./01/05/the-scary-insurance-reality-for-airbnb-
hosts?slreturn=1480275175; Leiber, supra note 13.
21
Hayes, supra note 20.

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from ‘an insured location’”.22
“Business” is defined as: “A trade, profession or occupation
engaged in on a full-time, part-time or occasional basis; or Any other activity engaged in for money
or other compensation . . . .”23
This is commonly referred to as the “business pursuit exclusion.”
In the case of DogVacay and Rover, there is Georgia case law that appears to squarely bar coverage
based on the business pursuit exclusion.
In Salmon v. Commercial Union Ins. Co., the insured property-owner received $25 per
month to board a horse in his barn.24
The horse escaped and was killed.25
The horse’s owner sued
the property owner.26
The Georgia Court of Appeals upheld the trial court’s ruling that the
boarding arrangement constituted a rental and was therefore excluded by the business pursuit
exclusions in the subject homeowner’s policy.27
It is less clear how these same exclusions might apply to an Airbnb rental. Notwithstanding
the holding in Salmon, the Georgia Court of Appeals has consistently interpreted the business
pursuit exclusion somewhat narrowly, refusing to apply the exclusion to part-time hobbies that
may have an economic component or to in-home child care businesses where the homeowner
earned only “pin money.”28
As a result, an Airbnb host in Georgia who makes minimal cash
22
The policy language quoted in this paper was taken from my own homeowners’ policy issued by Travelers. It is a
proprietary HO-3 (10-06) form, but the language quoted is representative of other standard HO-3 policies. Travelers
HO-3 (10-06) p. 19 of 25.
23
Travelers HO-3 p. 1 of 25.
24
154 Ga. App. 8 (1980).
25
Id.
26
Id.
27
Id. at 8-9.
28
United Servs. Auto. Ass'n v. Lucas, 200 Ga. App. 383, 385 (1991) (refusing to apply the business exclusion to an
in-home daycare, even though the insured treated the daycare as a business by reporting income to the IRS and taking
business deductions, because the insured only cared for seven children, four of whom were her own grandchildren,
and because the childcare services were offered as “both a favor and a convenience to parents who lived in the
neighborhood”); see also Nationwide Mut. Fire Ins. Co. v. Collins, 136 Ga. App. 671, 674 (1975); S. Guar. Ins. Co.
v. Duncan, 131 Ga. App. 761, 764 (1974) (business pursuit exclusion did not bar coverage for an injured neighbor
during work on the insured’s race car where the insured, who was employed full time as a mechanic, engaged in racing
as a part-time hobby even though there was the potential to earn prize money). The Travelers’ policy quoted herein
provides an exception to the business exclusion for home daycare services provided to relatives or for which no
compensation is received.

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renting out a room on an occasional basis and is otherwise employed, may have an argument that
the business pursuit exclusion does not bar coverage.
There are also exceptions to the business pursuit exclusion within which an Airbnb host
may fit. For example, many standard policies provide an exception for the business use of the
residence as an “occasional” rental: “This exclusion does not apply to: a. The rental or holding out
for rental of an “insured location”; On an occasional basis if used only as a residence.”29
(It did
not appear that the policy in Salmon had the exception for occasional rentals and the horse had
apparently been boarded there for some months, in any case.30
) The business exclusion also does
not apply to activities “for which no ‘insured’ receives more than $2,000 in total compensation for
the consecutive twelve months before an ‘occurrence.’” According to one study, Airbnb hosts in
New York City earned an average of $5,474 from June of 2015 through June of 2016.31
New York
is reportedly one of the most lucrative markets for Airbnb.32
Therefore, it is possible that a host
in Georgia may not meet the $2,000 threshold (query, though, why anyone would bother for less
than $2,000 per year).
As for the exception for the “occasional” rental, that raises the issue of what legally
constitutes an “occasional” rental. The Georgia Court of Appeals recently examined the term, but
in a different context.33
The case involved the rental of lake property that the owner was intending
to sell.34
The homeowner sought insurance coverage following a personal injury suit by the tenant
29
Travelers HO-3 p. 19 of 25.
30
Salmon, 154 Ga. at 8.
31
Madeline Farber, Here’s How Much New York City Airbnb Hosts Earn in a Year, Jul. 8, 2016, Fortune,
http://fortune.com/2016/07/08/how-much-money-airbnb-hosts-make-new-york-city/.
32
Katie Benner, Airbnb Sues Over New Law Regulating New York Rentals, Oct. 21.2016, NY Times,
http://www.nytimes.com/2016/10/22/technology/new-york-passes-law-airbnb.html. Interestingly, this is the case
despite that the fact that short-term rentals are largely illegal in New York. See id.
33
State Farm Fire & Cas. Co. v. Moss, 338 Ga. App. 684, 684 (2016).
34
Id.

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alleging she was injured by a hazardous condition on the property.35
The court looked at other jurisdictions and noted that “[o]ccasional rentals are episodic and
temporary, not systematic and continuous.”36
Such rentals are “typically short term” and for “a
special purpose (e.g., a vacation rental).”37
The court found it “most significant” that the insured
homeowner had no intention to return to the property and use it as a second home.38
Thus, the
case provides little guidance as to how the court would apply this provision to a home-sharing
service such as Airbnb. Arguably, under that definition, an Airbnb rental could be “occasional”
provided such rentals were not “systematic and continuous”, and provided the homeowner
continued to occupy the residence or planned to return to the residence. It is also reasonable to
interpret an “occasional” rental as renting out one’s home for an annual event, such as The Masters
Golf Tournament, but not as an on-going listing on Airbnb’s website.39
If an Airbnb guest filed suit for property damage that occurred during her stay, most
homeowner’s policies exclude coverage for “[p]roperty of roomers, boarders and other tenants,
except property of roomers and boarders related to an ‘insured.’”40
The standard homeowner’s
policy also limits the amount of coverage for the insured’s personal property that is used primarily
for business purposes. Thus, there likewise may not be coverage should the Airbnb guest destroy
the host’s property.41
35
Id.
36
Id. at 686 (collecting cases).
37
Id.
38
Id. at 687.
39
See, Peer-to-Peer Home Rental: The Sharing Economy and Homeowner’s Insurance, Insurance Information
Institute, http://www.iii.org/article/peer-peer-home-rental.
40
Travelers HO-3 (10-06) p. 4 of 25.
41
Hayes, supra note 20.

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These issues are not merely hypothetical. In one widely-publicized story, a man was killed
while staying at an Airbnb location in Texas.42
He was using a rope swing at the property when
the tree to which the swing was attached collapsed and fell on him, causing severe head injuries
that ended most of his brain activity and ultimately caused his death.43
The decedent’s son, Zak
Stone, wrote poignantly about his father’s death and other safety concerns raised by Airbnb for the
online magazine Matter.44
In Mr. Stone’s case, the Airbnb host had an insurance policy that
specifically covered commercial activities.45
In another reported case, Airbnb initially refused to
pay for the hospital stay of a guest who was attacked by the host’s dog.46
Still another Airbnb host
returned to find that she had been robbed and her apartment vandalized.47
The Airbnb “guest” also
stole her identity.48
Airbnb’s CEO, Brian Chesky, was reportedly assisting the woman
“financially, find[ing] new housing . . . and anything else she can think of to make her life easier.”49
Home-sharing platforms have responded differently to these issues. As of October 2015,
Airbnb provides “Host Guarantee Coverage” in all fifty states.50
The Host Coverage affords up to
$1M in liability coverage. While that sounds generous enough, industry analysts have criticized
the coverage as too restrictive and as imposing too many conditions of coverage.51
The
homeowner must first try resolve the issues with the guest before contacting Airbnb and only
42
Ron Leiber, Death in Airbnb Rental Raises Liability Questions, Nov. 13, 2015, NY Times,
http://www.nytimes.com/2015/11/14/your-money/death-in-airbnb-rental-raises-liability-questions.html; Zak Stone,
Living and Dying on Airbnb, Nov. 8, 2015, Matter, https://medium.com/matter/living-and-dying-on-airbnb-
6bff8d600c04#.40ro51hzi.
43
Leiber; Stone, supra note 42.
44
Leiber; Stone, supra note 42.
45
Stone, supra note 42.
46
Ron Lieber, Questions About Airbnb’s Responsibility After Attack by Dog, Apr. 10, 2015, NY Times,
http://www.nytimes.com/2015/04/11/your-money/questions-about-airbnbs-responsibility-after-vicious-attack-by-
dog.html?_r=1.
47
Hayes, supra note 20; Andrew Dalton, San Francisco Woman’s Apartment Ransacked by Seemingly Cordial AirBnB
Renter, Jul. 28, 2011, sfist, http://sfist.com/2011/07/28/san_francisco_womans_apartment_rans.php
48
Dalton, supra note 47.
49
Id.
50
https://www.airbnb.com/host-protection-insurance.
51
Hayes, supra note 20.

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damage that occurs within the “booking period” is covered; there is no coverage in the event a
guest arrives early or overstays the booking.52
Any damage must be reported within fourteen days
and there are certain exclusions, such as loss of cash or damage to pets.53
Airbnb’s website also
claims that the “Host Protection Insurance program may also cover claims if a guest damages
building property.”54
There is no explanation as to the limits of coverage or what exactly may be
covered. HomeAway, a competitor, has simply urged its users to purchase a commercial general
liability policy.55
Returning to DogVacay and Rover, Georgia law imposes liability on the owner or “keeper”
of a dog for any injuries suffered by third parties. Such claims can be based on Georgia’s dog bite
statute or on a theory of premises liability.56
Unlike some states, however, Georgia requires some
advance notice of a dog’s tendency to bite.57
Therefore, in a scenario where a third party injured
by a Rover or DogVacay boardee pursued a claim against a DogVacay or Rover host, it is probably
unlikely the host would have the requisite advance notice of the dog’s dangerous tendencies. That
does not mean, however, that a Rover or DogVacay host may not find herself saddled with legal
fees that are not covered by her insurance policy under the holding of Salmon, above.
Furthermore, in addition to excluding claims for damage to the personal property of others
(dogs are personal property in Georgia), many policies also exclude claims for animals. As a
result, a DogVacay or Rover host has personal liability exposure should something happen to the
visiting dog or cat. The Georgia Supreme Court recently decreed that “the proper measure of
damages recoverable . . . for the negligent injury and death” of a pet is the “fair market value plus
52
Id.; see also https://www.airbnb.com/users/hpi_program_summary_pdf.
53
See Hayes, supra note 20.
54
https://www.airbnb.com/host-protection-insurance.
55
Leiber, supra note 42.
56
O.C.G.A. §§ 51-2-7; 51-3-1; Swanson v. Tackling, 335 Ga. App. 810, 812 (2016).
57
Swanson, 335 Ga. App. at 812.

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interest and any reasonable medical costs and other expenses [the dog owner] incurred in treating
the animal for its injuries.”58
Anyone who has cared for an ill pet knows that treatment costs can
easily reach into the thousands of dollars.59
In sum, although these “disrupters” provide an alternative revenue stream and affordable
temporary accommodations and pet care options, they also expose users and hosts to a myriad of
dangers that may not be covered by insurance. It is important that guests and pet owners are aware
that any injuries or damage to property may not be covered by insurance. Hosts need to understand
that in the event something goes wrong, they may be on the hook for an amount far in excess of
any earnings generated through the sharing platform.
58
Barking Hound Vill., LLC v. Monyak, 299 Ga. 144, 151 (2016).
59
The medical bills in Barking Hound Vill, were $10,000. Id.