Committee advances bill requiring insurance backstop for marketplace damage guarantees

The Senate Insurance and Labor Committee voted to advance SB503 (LC 461445S), a bill that would codify property-damage guarantees offered by marketplace platforms and require a reimbursement insurance policy to backstop those guarantees.

Sponsor remarks and witness testimony framed the bill as consumer protection and statutory clarification. The sponsor told the committee the proposal is "really a transparency bill, but also a consumer protection bill," and that it is limited to property damage rather than liability coverage. "The guarantee that the, that the Airbnb, as an example, offers is not insurance," said Brad Nail, an Airbnb representative, explaining the product functions more like a service contract and that the bill would place a regulated reimbursement policy behind such guarantees.

Committee members pressed witnesses on scope and oversight. Senator Merritt asked whether the guarantees would provide weaker protection than insurance; Nail replied the bill requires the vendor to disclose the product is not insurance and that the reimbursement policy is meant to work "alongside your homeowners insurance." Several senators asked who bears the cost; Nail said the cost is generally "baked into the cost" charged to hosts and/or guests under platform terms and conditions. Nail also said Airbnb’s own program carries up to a $3,000,000 cap.

The committee discussed regulatory authority if a reimbursement policy is admitted or placed as a surplus-lines policy. Sponsor and witnesses explained that an admitted reimbursement policy would fall under the state insurance commissioner’s authority and that the bill includes rulemaking authority for the commissioner.

Senator Lucas moved that the bill be given a do-pass recommendation; the motion was seconded and carried on a roll call the committee recorded as six yeses and two noes. The committee chair encouraged members to review model law work provided by the National Council of Insurance Legislators, which the bill’s drafters said informed the text.

The committee’s action advances SB503 to the next stage; committee members said they expect administrative rulemaking and regulatory oversight language to guide implementation if the bill becomes law.