We have been getting calls from some of our customers asking us about insurance they would need if they choose to rent their property as a short term rental. They would consider the AirBNB or VRBO model and wanted to be sure their current homeowners insurance would cover them. Simply put – it won’t!

The standard homeowners policy is for the homeowner who has a place where they reside and occupy the premises. It’s not designed for business usage for rental – much less short term rentals. There are very few policies in the market as of now that will cover those type of exposures. If we were able to insure it, there would have to be an industry change in the insurance forms used to define coverage or move the policy to a commercial one. That’s why we are seeing some of the rental agencies themselves, like the above mentioned, coming to the table with more coverage for their types of risks.

In the last few days, AirBNB announced that it has given its Home Protection Insurance program a makeover, beefing up its liability insurance coverage in an effort to attract new hosts to the short-term rental service.

Airbnb said that its insurance program, which offers up to $1 million in liability protection, has been upgraded from secondary insurance to a primary program and made it available to nearly 1 million hosts in 16 countries, regardless of other insurance coverage the host may already carry. The expansion is expected to persuade people who were thinking of signing up to be a host but were reluctant due to liability concerns.

“The majority of our hosts are middle-class people that use Airbnb to make ends meet, and we try to make hosting as simple and stress-free as possible for them,” Jakob Kerr, a spokesman for the San Francisco-based startup, said in a statement. “This expanded version of the program will make it easier for people to host on Airbnb with peace of mind, and we believe it’s a groundbreaking collaboration between Airbnb and the insurance industry.”

Airbnb is just one of dozens of companies to describe itself as part of the sharing economy, the idea of using the Internet to create person-to-person marketplaces. Some services let people swap bicycles, tools and musical instruments. Others, like Airbnb, let people sublet their rooms, or their entire homes when they’re not around.

Consulting firm PriceWaterhouseCoopers estimates that global revenue across all sharing-economy companies, which is roughly $15 billion today, will increase to around $335 billion by 2025. While such companies promise convenience or an easy way to make a buck, they also raise concerns about various local issues, including insurance.

The issue came to prominence a year ago when San Francisco passed a so-called Airbnb law, which allows people to rent their rooms or homes for up to 90 days per calendar year. The law requires, among other things, that hosts carry at least $500,000 in liability insurance, a tricky situation as many homeowner’s and renter’s insurance policies don’t tend to cover business activities in the home.

“Some insurance companies may provide coverage if you occasionally rent out a room, but making all or part of your home available for regular rental likely would be considered business use,” the Oregon Insurance Division warns in an advisory page that mentions Airbnb by name. “Homeowner policies generally do not provide coverage for business use.”

Airbnb’s insurance program provides up to $1 million in coverage if a guest is accidentally injured on a host’s property or surrounding area. It may also cover other costly situations in which a guest accidentally causes damage to surrounding property, such as a water leak in a host’s apartment causing damage to a neighboring apartment.

Airbnb hosts don’t need to do anything to become part of the program. The Host Protection Insurance program covers hosts’ bookings as long as they are in one of the countries included in the program.

The program, which launched in the US in January, now covers hosts in Australia, Canada, China, France, Germany, India, Ireland, Italy, Japan, The Netherlands, New Zealand, Portugal, Singapore, Spain and the United Kingdom.