Interested in Renting Pools or Tools? What You Need To Know About Participating in the Sharing Economy

The internet is relentless in finding ways to maximize the sharing of resources, and the creation of online/mobile platforms that match buyers with sellers has made this process more streamlined and much easier.

The success of AirBnB, Uber, Lyft, and other similar companies has spurred increased opportunities for individuals to generate income by utilizing the property, assets, or services they already own, and allowing other parties access to these things on an as-needed fee-based basis. The growing trend is to arrange for products and services among individuals, such as pet care, borrowing cars, housecleaning, renting bikes, performing deliveries, and more as different ideas arise. Recently, two newer ideas have been receiving more traction: services that allow the rental of private pools and the rental of power tools.

Pools

Similar to AirBnB, platforms that allow individuals to rent outdoor or indoor pools by the hour or by the day are gaining popularity. Users can access a web or mobile portal to view available facilities in the area. Rates are based on factors such as the pool size, access to adjacent facilities, use of related property (such as pool toys or waterslides), purpose of the rental, size of the party requesting the rental, and more.

This interesting idea certainly provides significant benefits. People who don't have access to pools can find affordable facilities and rent them for flexible periods and for a variety of reasons, such as one hour to relax at a pool alone, two hours for swimming laps, four hours for a poolside dinner party, or an entire day for large parties and special events. The use of residences may be significantly more affordable and convenient than commercially available facilities. They may also be more attractive since they can be used exclusively, unlike public or commercial facilities.

Tools

Another popular service involves the ability to rent individually-owned power tools. The platform-based service allows people who don't own expensive tools to rent from those who do. Since most people do not regularly have a need for special tools, such as a table saw, it makes sense to borrow from someone who owns the needed equipment and can part with it for a period of time rather than buy your own.

When a person encounters a special project or sees the need for maintenance and/or repair on a piece of property, a new alternative is to temporarily acquire the tool or equipment, use it, and return it with payment. It's much cheaper than buying a rug-cleaner that's only used a couple of times a year or buying radial saws, nail guns, routers, power washers, paint sprayers, etc., when the need for them may only come once every few years.

On the other hand, those who are property owners can rent out their tools, recouping some of their investment while retaining the property for future use.

However, there is a downside that sharing economy participants should know about.

The property owners who supply pool facilities and tools for rental may enjoy additional income, but they also create new risks.

Residential property insurance policies for homes, condos, apartments, and so on provide valuable protection. This protection is put at risk when making property available to others. Renting out residential property, parts of residential property (such as pool areas), and/or personal property (equipment or tools) may mean losing protection.

Insurance policies commonly exclude situations that involve chances of loss beyond what they charge in premiums. One area that endangers protection is business activity which is, loosely, defined as endeavors pursued for income or equivalent benefits. Renting out personal property, such as pools and tools, could result in losing protection for lost or damaged property. Coverage can hinge on whether the situation involved is considered a business activity. Some policies may vary in defining such activities, such as how often an activity is performed or how much income or equivalent value is acquired. However, enrolling in platforms that facilitate rentals may be enough for an insurer to ignore other considerations and treat any loss from certain circumstances as business activities, thus denying coverage.

Here are some simple things to consider:

Another negative is that the platforms that facilitate such rentals may, as part of their agreement, require participants to waive any right to sue, or to hold the platform harmless for any losses that arise from the platform's use. It is important when considering joining the sharing economy that you make sure that you don't open yourself up to uncovered and potentially serious losses.

If you have more questions about participating in the sharing economy, call Williams Insurance. With over 80 years of experience, we can guide you in the right direction using the right protection.