Renting out your pool? Beware the home insurance liability pitfalls

This article has been updated from a previous version.  

With summer on its way, you may be thinking of how to turn the impending hot weather into some extra cash by renting out your swimming pool.  

Renting out a pool isn’t as common as renting out a spare room, but that may be changing thanks to an Airbnb-like online service called Swimply, which launched in 2018 and serves as an online directory for those looking to list and rent their private pools across North America and Australia. 

Among the service’s many listings in Ontario, most backyard pools are ready to be rented for anywhere between $30 to $100 per hour. 

However, while it sounds like a simple way to make a quick buck, lucky pool owners might want to consider the risks to their liability and home insurance before signing up. 

Renting out your pool is a “business use of your home” 

"Most homeowners' insurance policies are intended to cover the occupancy and use of your everyday home," says Stefan Tirschler, vice president of technology and innovation at Royal Claims Services. “And that's a simple process because most people occupy and use their homes in fairly predictable and standard ways.”  

However, when a homeowner decides to introduce unconventional uses of their home – like renting out their pool, which is considered a business use – it becomes a little trickier to determine risk.  

"Therefore, insurers would need to take a closer look at that in order to know how much to charge," he says.  

As soon as you start renting out a portion of your home for compensation, that would fall into most policies’ business use exclusions. As a result, any claims arising out of that business use wouldn’t be covered.  

If a renter hurts themselves in your pool, will you be covered by home insurance? 

Questions like this are exactly what plagued Airbnb when it first became popular in 2010. When it comes to renting out your pool, the answer is no.  

If someone were to sue you because they injured themselves while swimming in your pool during their rented time and allege that it was your negligence that resulted in their injury, your home insurance policy would not protect you from any damages.  

However, the risk to you as a homeowner goes beyond the injury itself.  

"A common objection people might have is 'What are the chances someone's going to get hurt in my pool when I take great care of it? It's new, it's safe, and I'm watching,” says Tirschler. “One important reminder is someone doesn't actually have to get hurt in order to sue you. All they have to do is say that they were harmed in some way because of your property, and that's all it takes for you to be in the position of needing to defend yourself." 

For example, a renter could claim to have developed or noticed an injury days after they were enjoying your pool and – whether true or not – attribute it to your pool, when in fact it might have been due to something else entirely. 

Read more: Backyard pools and home insurance: what you need to know 

Tell your home insurance provider you’re renting your pool and get the right coverage 

You can never fully predict when or whether someone gets hurt on your property, but you can notify your home insurance provider that you plan to rent out your pool – or whatever part of your property – for business purposes.  

Once you disclose your business use, your insurer can tell you what relevant coverage you might already have, and/or what you might need to fully protect yourself.  

By not doing so, you could leave yourself vulnerable to any future liability, and risk your policy not being renewed. 

"Not all home insurance providers might be comfortable insuring a home that has a business or revenue generation activity," says Tirschler. "If you don't notify them, that doesn't mean that the exclusion doesn't apply to you. All it means is you won't find out about the exclusion until you make a claim for what's excluded." 

Swimply’s liability coverage may not be enough for homeowners 

Like Airbnb and other short-term rental sites, Swimply does offer its own insurance policy for hosts, called the Swimply Protection Guarantee. It covers up to $2 million in liability.  

While that liability coverage may sound like a lot but it can get eaten up pretty quickly in a lawsuit. That amount may not cover you entirely depending on the claim. 

The company also has a long list of scenarios in which insurance will not apply, including: 

• Injuries that occur outside of the booking time 

• Injuries in which alcohol was involved (the Swimply states that neither the service nor a host can be held responsible if alcohol or any other substances were consumed) 

• Injuries that arise from a swimming lesson or class 

• Injuries related to a sports activity 

• Injuries to pets during a booking. 

That first point about injuries occurring outside the booking times gives Tirschler some pause. 

“Depending on the person, that could be problematic, especially when you consider that many liability scenarios don't always happen right away,” he says. “So, if you were to rent your pool to someone, and two or three months later you receive your first notice from them in which they allege an injury, if a policy had a really strict reporting timeline on it, then it still might not be of assistance to you." 

All of which is to say, if you’re considering taking the plunge and renting out your pool, read the service’s terms and conditions carefully — and get acquainted with the finer print in your home insurance policy, too. 

Read next: Short-term rental insurance: how it works and which insurance companies offer it