Nikki Johnson No Comments

Liabilities of Non-Profit Board of Directors

Liabilities of Non-Profit Board of Directors

Non-profit organizations provide essential social services that benefit communities and their members. The vast majority of these organizations cannot survive without a volunteer board of directors assigned to elect officers, adopt policies and make major financial decisions for the organization. Although members of the board are volunteers, there is a certain amount of risk involved in holding one of these positions. Specifically, even when acting in good faith, board members are subject to personal liability, which may affect their personal financial status because of their management decisions. The role of a volunteer board member does come with certain legal responsibilities and certain legal ramifications when things do not go right. 

It is imperative that your organization and board of directors understand the risks involved with their responsibilities as board members and the ways in which they can protect themselves from personal liability.  Every community organization has a duty to educate prospective and sitting board members on their legal duties and obligations on an annual basis.  That said, ignorance is not a defence at law and where the organization fails to provide information it is ultimately the personal responsibility of each board member to educate themselves before accepting a volunteer board position and/or continuing to serve on a board.  Having one’s name on the letterhead does bring real ramifications.  

Risks and Responsibilities

To combat the chance of affecting the personal liability of board members, non-profit organizations should assess the risks involved with holding these positions. Your organization should first develop a volunteer risk management committee to identify all risks and pose solutions to minimize potential harm. In addition, you need to ensure that the board members understand their governance responsibilities. Your non-profit should educate its board on their legal duties, fiduciary duties and decision-making roles. Furthermore, the risk committee should ensure the following:

  • The organization is working within its stated mission.
  • Funds are spent according to the mission and spending decisions are known to donors. The organization does not accept donations with conditions.
  • Individuals advancing personal agendas counter to the organization’s mission are not allowed to sit on the board.

Once the risks are assessed and the board of directors is aware of those risks, board members must also understand the responsibilities associated with the positions they hold. Legally, board members have three main duties:

  1. Duty of Care: The individual should act in the way that a reasonable person would act in a similar position and under similar circumstances. Acting under good faith is an essential part of the functions of the board.
  2. Duty of Loyalty: The individual should place the organization’s financial interests as the primary responsibility. As a board member, one should not use his or her position for personal gain, financially or otherwise. In addition, individuals should be honest about business ventures that pose a conflict of interest when acting as a representative of the organization.
  3. Duty of Obedience: The individual should try to further the mission of the non-profit by supporting board decisions and implementing policies as they are outlined.

Board members who fail to fulfill their duties as outlined above may be held liable for their actions or inactions.

Protections

Since there are risks involved with being part of a non-profit board of directors, there are several protections available to minimize personal liability. First, most non-profit organizations have indemnification provisions in their bylaws. These provisions explain that the organization will cover or reimburse the legal expenses accrued by board members in the event of a lawsuit. However, it should be noted that indemnification is only as good as an organization’s financial ability to pay it. If an organization does not have excess funds, it may not be able to support this provision.

Incorporated organizations are required by law to indemnify their directors for such losses. There is no such obligation imposed upon unincorporated groups, but most groups do offer indemnities because it is a good policy to do so.

Finally, non-profit organizations should purchase directors and officers (D&O) liability insurance to cover their board members in situations that fall outside of the indemnification provisions or in the event that their financial situation does not allow them to cover extensive legal expenses.

Beyond providing a financial backing to indemnification provision, D&O liability insurance is essential since most individuals will not volunteer on a board with the knowledge that they are risking their personal assets in the event of litigation.  Further, D&O can include coverage to protect board members from claims made against them for hiring/termination decisions, failure to make statutory remittances and costs of investigations.  The potential for personal loss is real! 

More Information

Proper insurance coverage and other risk management strategies can help ensure that your organization and its board of directors is protected against liability. For more information about appropriate insurance coverage, contact Reith & Associates Insurance and Financial Services Limited at 519.631.3862 today.

Dan Reith, Principal Broker
Dan Reith, Principal Broker

Dan Reith

Principal Broker
Reith & Associates Insurance and Financial Services Limited
https://reithandassociates.com/
https://www.linkedin.com/in/dan-reith-ba-hons-caib-b7a11b20/

Nikki Johnson No Comments

DATA BREACH: A Concern for Director’s & Officers of ANY Entity

DATA BREACH:  A Concern for Director’s & Officers of ANY Entity

A data breach can be a devastating event, affecting a company or not-for-profit financially and damaging its reputation. As a director or officer, you face litigation risks based on the decisions made following a breach and on how you influenced cyber security policies, as these are often considered board-level issues. This is true for directors and officers of small/medium incorporated enterprise (the directors, officers and owners/shareholders are typically the same) and volunteer directors and officers of not-for-profit groups as well. 

If a suit is filed against you after a data breach occurs, based on your position as a board member, you will not be protected by your commercial general liability policy or your cyber liability policy. Your best source of protection is from your directors and officers (D&O) policy, as long as your policy is tailored to include protection after a data breach. Sadly, the majority of privately owned small/medium businesses in Canada do NOT make D&O cover part of their insurance program.  Either due to naïve skepticism or concern over additional cost.

DATA BREACH THREATS

The biggest threat from a data breach is loss of information, whether it is information regarding your company’s finances or the personal identification information of your employees and customers, such as Social Insurance numbers, banking and/or credit card information.

Losing sensitive information belonging to your employees/customers or company can have a devastating effect on your reputation. If the credit card information of your customers is stolen, your customers would need to cancel their cards and get new ones—an inconvenient process and one that can damage your company’s image in the eyes of customers.

DATA BREACH RESPONSE

Following a data breach, you may be legally required to notify certain people about it. For example, if your company is publicly traded, guidelines say you must report cyber security incidents to stockholders. The cost of notification after a breach is generally covered by a cyber liability policy; and, depending on the number of people you need to notify, the cost can be quite high.

Notification should be taken very seriously, as the way a company responds to a data breach can lead to exposure and legal action beyond lawsuits from customers—the company could be subject to regulatory action.

DATA BREACHES AND D&O COVERAGE

Insufficient cyber security that leaves your company vulnerable to a data breach can be seen by your customers or shareholders as negligence or a breach of duty. Your customers and shareholders may seek to hold you responsible for the damage, as the board is responsible for making decisions on behalf of the company. Because of this, you need protection in the form of a D&O policy.

In past legal cases following a data breach, directors and officers have been accused of:

  • Failing to take reasonable steps to protect customers’ personal and financial information
  • Failing to implement controls to detect and prevent a data breach
  • Failing to report a breach in a timely manner

A cyber liability policy would not offer the legal protection needed by directors and officers after a data breach, whereas a D&O policy can.

A D&O policy provides coverage for a “wrongful act,” such as an actual or alleged error, omission, misleading statement, act of neglect or breach of duty.

CYBER SECURITY IS VITAL

A company’s directors and officers are expected to be involved in and knowledgeable about the company’s cyber security. It’s rapidly becoming a vital aspect of responsible business management and customer service.

The following are some techniques to improve the cyber security of your company:

  • Install a firewall—Companies with five or more computers should consider buying a network firewall to protect the network from being hacked.
  • Install security software—Anti-virus, anti-malware and anti-spyware should be installed on every computer in the network. All software should be up-to-date.
  • Encrypt data—All data, whether stored on a tablet, flash drive or laptop, should be encrypted.
  • Use a virtual private network (VPN)—A VPN allows employees to connect to the company’s network remotely without the need of a remote-access server. VPNs use advanced encryption and authentication protocols, providing a high level of security for your network.
  • Develop a data breach plan—Have a plan in place so when, not if, you experience a data breach, you can act quickly and minimize your loss.

DATA BREACH RISKS WITHOUT D&O INSURANCE

After a data breach, claims from shareholders and customers will most likely be made. Since you can be held personally responsible for the acts of the company as a board member, your plans and decisions need to be protected.

Without D&O coverage, your personal assets are at stake and could be forfeited to cover legal costs. You can protect yourself with a D&O insurance policy. Talk to your insurer about this type of coverage and be sure your policy is tailored to cover any gaps. Note, that not all D&O polices are the same.  It is important to look at the policy coverage and not the price when making a choice.  D&O is also a specialized form of insurance and not all insurance providers are well versed in the coverage and/or the nuance of policy wordings.  It is important that you select an insurance provider that is educated and knowledgeable about D&O and is able to provide choice and not just a one-size fits all policy.  Selecting the wrong provider and the wrong policy that fails to respond to the breach is also something regulators, shareholders, customers and employees could sue you for.

Dan Reith, Principal Broker
Dan Reith, Principal Broker

Dan Reith

Principal Broker
Reith & Associates Insurance and Financial Services Limited
https://reithandassociates.com/
https://www.linkedin.com/in/dan-reith-ba-hons-caib-b7a11b20/

Nikki Johnson No Comments

Liability Exposures in a Rough Economy

Liability Exposure in a Rough Economy

An economic downturn can be a turbulent time for businesses in every sector worldwide. Sinking revenues and economic uncertainty can exacerbate our already litigious society, and even companies that successfully weather economic downturns relatively unscathed can still face long-term uninsured risks. For this reason, Reith & Associates Insurance and Financial Services Limited has compiled these tips to effectively manage your company’s exposures as it adapts to the current business climate and moves into the next economic cycle.

Supply Chain Dependency

It’s no secret that in times of economic downturn, cutting costs is a necessity. However, it is important to remember that the financial security of your business can hinge on that of your partners, vendors and suppliers.

In a tough economic climate, do not rely on the insurance coverage of your business partners to protect your assets or prevent third-party liability claims. Any member of the supply chain can be held responsible for its counterparts’ torts. A distributor, for example, may be liable for a claim filed against its manufacturer when it goes out of business.

Therefore, in order to protect your company, it is a wise long-term investment to expand your coverage limits. While it may be tempting to cut costs by limiting coverage, this decision could expose you to severe liabilities due to your supplier’s shortcomings. If you currently deal with foreign manufacturers or if you’re considering outsourcing for the first time, talk to Reith & Associates Insurance and Financial Services Limited about covering the associated risks.

Rely on Solid Contracts

In times of economic change, it is more important than ever to ensure your protection with thorough, seamless contracts. They should clearly outline both parties’ obligations and discuss dispute resolution policies to avoid messy and expensive disagreements. An indemnity term can be included in contracts with foreign suppliers in which the supplier consents to the jurisdiction of Canadian courts and indemnifies its sellers here in the event of a claim involving one of its products. Remember, however, that this contractual indemnity is only as valuable as the manufacturer’s ability to pay.

It is essential that you effectively manage your company’s exposures as it adapts to the current business climate and moves into the next economic cycle.

It is never a good business decision to sign a contract hastily, so be sure to explore all the risks and legal ramifications, especially in difficult economic times. Small companies who partner with larger companies are often strong-armed into making decisions with which they are not completely comfortable.

Changing to Survive

For many businesses, change is an intelligent way of reacting to an economic crisis. It allows you to explore new customer bases and offer additional products or services. While expanding in either of these ways can revolutionize your business and keep you afloat in tough times, it could also expose you to additional liability you have not dealt with before.

When you begin to step into new lines of products or services, you will inevitably face a learning curve, which puts you at a larger risk of facing product liability claims. You may want to consider purchasing additional lines of coverage to protect yourself, as your surplus lines insurance policy may only cover claims arising from one particular product.

Shifting or expanding your customer base may also open you up to class action lawsuits. New markets may react differently to product failure. Thus, it is vital to be covered for potential liabilities resulting from a change in your business. Contact Reith & Associates Insurance and Financial Services Limited today to assess exposures that could be associated with your business plan.

Dan Reith, Principal Broker
Dan Reith, Principal Broker

Dan Reith

Principal Broker
Reith & Associates Insurance and Financial Services Limited
https://reithandassociates.com/

Nikki Johnson No Comments

Social Engineering & Fraud Insurance Coverage

Social Engineering Fraud
Social Engineering Fraud

Social engineering fraud (SEF) is a type of fraud that’s become increasingly common over the last several years. However, even though many instances of this fraud transpire over email communications, it’s a company’s crime policy—not a cyber policy—that would often provide coverage in the event of an SEF loss.

That’s why it’s especially important to understand your crime policy, how it might cover SEF, why it might not, and what endorsements you might want to obtain to make sure SEF doesn’t leave your company exposed.

How Social Engineering Fraud Works

There are a number of variations on the theme, but most instances of SEF involve the following elements:

  • A targeted approach. Criminals will research their targets, purchase authentic-looking domains, manufacture email chains and even resort to making phone calls, all in an effort to make their requests seem authentic.
  • A request. The preparation is in service of obtaining something from the target, either money (usually in the form of a wire transfer) or information (such as a list of vendors, routing numbers, etc.).
  • The application of social pressure. In order to bypass in-house safeguards and redundancies, the criminals apply pressure by imposing a time constraint, demanding secrecy or simply flattering the ego of the target by including him or her “in” on an important business transaction.
  • The disappearance of the hacker. Once the criminals obtain what they want, they disappear with the information or money—things that the company won’t miss until it’s too late.

Cyber Policy vs. Crime Policy

It may seem counterintuitive, but SEF is usually not covered by a cyber policy. Even though this fraud often involves emails and wire transfers, cyber policies are not designed to cover them:

  • Cyber policies cover losses that result from unauthorized data breaches or system failures. SEF actually depends on these systems working correctly in order to communicate with an organization’s employees and transfer information or funds.
  • Crime policies cover losses that result from theft, fraud or deception. Because the underlying cause of a loss in SEF is fraud, a company would claim a loss under its crime policy rather than its cyber policy.

Areas of Cover

A standard crime or fidelity policy contains a few provisions under which an SEF claim might be filed:

  • Computer fraud. This refers to losses stemming from the unlawful theft of money due to a “computer violation”—that is, the unauthorized entry into or deletion of data from a computer system by a third party.
  • Funds transfer fraud. This refers to losses stemming from fraudulent instructions to transfer funds made without the insured’s knowledge or consent.

Potential Vulnerabilities

Depending upon the specific language and definitions laid out in the crime or fidelity policy, the insurer might argue that SEF is excluded from coverage for a number of reasons:

  • There was no “computer violation.” Often, SEF doesn’t involve compromising network security in order to steal data. Instead, criminals “hack” human vulnerabilities in order to gain access. Because the system functioned as it was supposed to, and the criminal gained access due to human failure, an insurer might try to deny the claim.
  • The insured knew about and consented to the transfer. Again, it depends on the specific language of the policy, but an insurer might argue that SEF isn’t covered under “funds transfer fraud.” That’s because, in most social engineering scenarios, some agent of the insured willingly and knowingly authorized the transfer of funds to the intended account. Again, in SEF, the systems in place to transfer funds worked as intended; it was human failure that resulted in the loss.
  • The voluntary parting exclusion. Most crime policies have a voluntary parting exclusion that excludes coverage for losses that result from anyone acting on the insured’s authority to part with title to or possession of property. In other words, because the employee knowingly and willingly authorized the transfer, it wouldn’t be covered.

Social Engineering Fraud Endorsements

Because of this potential gap in coverage, some carriers have started offering SEF endorsements to their crime and fidelity policies. The insurance agreements might go by different names, but they’re all intended to make limits and liabilities explicit for both the insured and the policy issuer.

These endorsements are only offered by a handful of carriers, but with the increasing prevalence of SEF, more are likely to follow. To learn more about SEF, we have resources available for you. Ask about our “Risk Insights: The Fake President Fraud.”

To discuss your coverage options and learn what options are available to you, contact your insurance provider today!

Dan Reith, Principal Broker
Dan Reith, Principal Broker

Dan Reith
Principal Broker
Reith & Associates Insurance and Financial Services Limited
https://reithandassociates.com/

Nikki Johnson No Comments

Why Builder’s Risk Coverage

Construction projects, regardless of their size, can present complex insurance issues. Are you confused about your exposures and policy options? If so, it’s no surprise — there are no standard builder’s risk policy forms covering these types of risks. To help you limit your exposure, here are some helpful builder’s risk policy basics.

Why Builder’s Risk Coverage – By Dan Reith, Reith & Associates

The Basics

Builder’s Risk coverage is a type of property insurance specifically designed to cover property during the course of construction, including renovation and repair. Why do you need it? There are additional risks and responsibilities inherent in this type of work that a typical property policy is not designed to cover. For example, if someone steals contractors’ equipment from the job site or if construction materials are damaged, you could be liable for the loss if you do not have builder’s risk coverage.

Typically the coverage is purchased by either the property owner or the contractor.

Regardless who purchases the coverage, all parties that have property involved in the project should be named in the policy. This may include the owner, contractor, subcontractors, the financial institution funding the project and, in some cases, the architects and engineers. Once the project is completed and/or accepted by the owner, your regular property policy kicks in.

Policy Period

When purchasing builder’s risk coverage, one of the issues often overlooked is the policy period – it may not be clear when the coverage begins and ends. As a result, keep the following in mind:

Commencement of Coverage: Builder’s Risk policies provide coverage for property in the course of construction, renovation or repair. But at what point does construction renovation or repair begin?

  • Typically, contracts require that insurance be provided for the duration of the contract period. This means that the policy inception date would be the date the contracts are signed.
  • The lender may also specify the inception date.
  • However, be sure to review insurance policy provisions to determine whether there are restrictions on when coverage begins. Policies may contain clauses that state coverage begins when construction commences or that the insurance company will pay for losses at the time you become legally responsible for the covered property, either on or after the effective date. Prior to any site preparation, demolition or delivery of materials or equipment, review the policy to ensure there are no restrictions on coverage inception.

Coverage Expiration: Determining when coverage terminates can be equally problematic. Builder’s Risk policies can contain provisions that terminate coverage prior to policy expiration. The provisions typically state that coverage will end at the earliest of the following:

  • The policy expires or is cancelled;
  • The property is accepted by the purchaser;
  • Your interest in the property ceases;
  • You abandon the construction with no intention of completing it;
  • Unless specified otherwise in writing:
    • 90 days after construction is complete, or
    • 60 days after construction is complete and building described in the declaration is:
      • occupied in whole or in part, or
      • put to its intended use.

Problems and Solutions

Problems

  • There is no coverage under the policy if the building is occupied to any extent, for over 60 days, without written consent of the insurance company.
  • The policy only provides coverage for up to 90 days after the completion of construction. In the case where the building is completed only two days before policy expiration, there are only two days of coverage available. There are 90 days of coverage available after completion only if there are at least 90 days remaining in the policy period.
  • Coverage issues can arise at the end of a project, after construction is complete and the structure is occupied, but a “punch list” and final completion work remains.

Solutions

  • Understand the insurance coverage obligations of the project documents and contracts to ensure the policy period, at a minimum, fulfills the requirements.
    • Understand the terms and conditions of the policy and what triggers the coverage to commence and cease.
  • When coverage ends make sure permanent coverage is in place so no gaps in coverage exist.

Careful planning is the foundation for a smooth construction project. Many businesses choose to transfer or accept risk through contracts, purchase orders and lease agreements. However, not all contracts or endorsements are created equal. A broker who understands your business can knowledgeably help you with builder’s risk policy language to meet your individual needs. Contact Reith & Associates Insurance and Financial Services Limited today to learn more about contractual risk transfer and its place in your overall risk management program.

Dan Reith, Principal Broker
Dan Reith, Principal Broker

Dan Reith

Principal Broker
Reith & Associates Insurance and Financial Services Limited
https://reithandassociates.com/

Nikki Johnson No Comments

Renting Your Property through Airbnb: Things You Need Consider

Airbnb offers individuals a unique opportunity to efficiently rent out their homes, spare bedrooms or other accommodations.

For travellers, Airbnb is a convenient platform that provides affordable and flexible alternatives to hotels. For property owners and tenants, the service easily connects various rental units with prospective occupants and makes collecting payments simple and secure. For the average homeowner, properties or spare rooms that are otherwise vacant can easily be transformed into a source of income.

Despite its convenience and the potential for profit, Airbnb is not without its risks.

Potential Insurance Gaps

If you are considering renting your property through Airbnb, your first step is to contact your insurance broker to review your current homeowners or renters insurance policy. Relying strictly on such policies while hosting guests through Airbnb can lead to significant gaps in coverage and leave you financially vulnerable.

While your homeowners or renters policy may allow you to rent your property to a guest, it is important to keep in mind that each insurer has its own restrictions and requirements. For example, some insurers may require advanced notice of any short-term rental, whereas others might insist that you purchase an endorsement to broaden your coverage.

Standard homeowners and renters insurance policies are designed for personal risks, not commercial use. If you plan to rent out your residence on a regular basis, many insurance companies will consider this commercial use. In many cases, regular Airbnb hosts will need to obtain a commercial insurance policy in order to be properly insured. It should be noted that a growing number of insurance companies now offer home-sharing liability insurance policies that can be purchased on a month-to-month basis.

Even more alarming, your homeowners or renters policy most likely won’t consider property damage caused by guests a covered peril. This means you could be left to cover the cost.

Issues with Airbnb-provided Protection 

To its credit, Airbnb does offer its hosts two forms of protection through its Host Guarantee and Host Protection Insurance. While hosts may be inclined to rely exclusively on these programs to manage their risks, there are significant gaps related to these offerings.

Host Guarantee

Airbnb backs every one of its bookings with its Host Guarantee coverage at no cost. Airbnb claims that this coverage will reimburse eligible hosts for damages up to $1 million. However, Airbnb readily admits that its Host Guarantee is not insurance and should not be considered a replacement or stand-in for homeowners or renters insurance. 

Moreover, payments through the Host Guarantee are subject to a lengthy list of terms, conditions and exclusions. Therefore, hosts should be aware of the following issues related to Airbnb’s Host Guarantee:

  • Hosts must attempt to resolve any issues with the guests involved prior to receiving any compensation. This also means that a host would have to make a claim on his or her own insurance policy before Airbnb would intervene.
  • Any sum collected from a standard policy or a security deposit would be deducted from the Host Guarantee.
  • The guarantee will only repair or replace covered property that is damaged during the time frame of an online booking.
  • This guarantee does not cover certain items, including, but not limited to, cash, collectibles, jewellery, pets, watercraft or any damage to property that is not considered a covered accommodation.

Host Protection Insurance

In addition to its Host Guarantee, Airbnb offers coverage to patrons through its Host Protection Insurance. Airbnb indicates that the program provides primary liability coverage for up to $1 million per occurrence in the event of third-party claims of bodily injury or property damage. Despite Airbnb’s claims, hosts should be wary of relying solely on this insurance program for a number of reasons:

  • Intentional acts that aren’t the result of an accident are not covered under this policy. In addition, Airbnb’s Home Protection Insurance does not cover what it refers to as property issues, which can include things like mould, asbestos and bedbugs.
  • Neither Airbnb’s Home Protection Insurance nor its fine print is readily available for review. What’s more, the policy is subject to limitations, conditions and exclusions. Together, this means that specifics around coverages are vague, and Airbnb hosts may not know what’s protected.
  • The personal property of any guest is generally not covered. Additionally, any theft or damage caused by a guest may not be covered either.

With Airbnb’s Host Protection Insurance, it’s best to assume that you aren’t equipped with the proper coverage. For full protection, it is likely that you will need to speak with an insurance professional to better understand the policy adjustments you will need in order to be fully covered.

Considerations for Condo Owners and Renters

While Airbnb opens its services to condo owners and renters, multi-unit buildings often have restrictive bylaws, homeowner association rules or lease terms that could impact one’s ability to host guests through Airbnb.

In many instances, commercial activities like renting out accommodations—even for a short period of time—are forbidden by lease or condo board policies. In some cases, hosts will need to contact their landlord or condo board before subletting or renting any accommodations out. Failure to do this can result in eviction or other forms of legal action. 

Even if you are allowed to rent out your condo or apartment through Airbnb, hosts should be aware that doing so can cause tension with neighbours. There’s the potential that your guests may be disrespectful to property in common areas, act inappropriately or noisily, or make other tenants feel uncomfortable.

Local and Provincial Laws Considerations

In response to the rising popularity of Airbnb, many provinces, cities and towns are moving to regulate short-term property rentals through their municipal codes or zoning regulations. In some cases, home rental services like Airbnb could be prohibited altogether.

If you break these local regulations, purposely or otherwise, you could face thousands of dollars in fines. What’s more, Airbnb says alignment with laws and regulations is the responsibility of those renting out accommodations. Accordingly, it is imperative to review local laws and regulations before you commit to using Airbnb to rent out accommodations.

Tax Considerations

Income from all sources is taxable in Canada, including internet-sourced rental income. Consequently, any income derived from Airbnb rentals must be reported to the Canadian Revenue Agency (CRA).

Depending on the number and nature of the services provided to guests, the CRA will consider money earned through Airbnb as either rental or business income. Furthermore, if the income you make from Airbnb exceeds $30,000 per year, you will most likely have to register for a harmonized sales tax (HST)/goods and services tax (GST) account through the CRA and will be subject to the applicable taxes. Provincial sales taxes (PST) will vary from province to province.

For those who have already earned unfiled income through Airbnb, coming forward through Canada’s Voluntary Disclosures Program (VDP) is recommended. Through the VDP, penalties for unfiled back taxes will be forgiven.

For more information on the tax implications of Airbnb and to ensure compliance, hosts are encouraged to contact a tax professional or the CRA.

The Bottom Line

While Airbnb offers a unique and potentially profitable service to users, it’s not without its faults. Before you decide to try it for yourself, be sure to consider all of the risks.

Again, you’ll want to minimize potential financial fallout by purchasing the appropriate insurance coverage. To discuss your options further, contact Reith & Associates Insurance and Financial Services Limited today.

Dan Reith, Principal Broker
Dan Reith, Principal Broker

Dan Reith

Principal Broker
Reith & Associates Insurance and Financial Services Limited
https://reithandassociates.com/