Mandatory liability insurance for AL: what the law requires

Liability insurance is one of those AL requirements that everyone knows exists — but few people stop to check whether what they have actually meets the standard. And when something goes wrong, that's not the moment you want to find out it didn't.

Let's work through it calmly.

What the law says

The legal framework governing alojamento local requires AL operators to hold a liability insurance policy covering damage caused to guests and third parties in the course of the activity. It's not optional, it's not a recommendation — it's a legal condition for operating.

That means that without a valid policy, your registration can be in breach, even if everything else is perfectly in order.

What the policy must cover

The law doesn't prescribe a single universal minimum insured sum — the requirements vary depending on the type of AL (villa, apartment, guesthouse) and the property's capacity. What matters is understanding the scope of cover:

• Bodily injury caused to guests during their stay
• Material damage to third-party property occurring on the premises
• Civil liability towards third parties who aren't guests but are affected by the activity

Some standard home insurance policies include exclusions for commercial activity — which means your household policy may cover nothing related to AL. It's worth reading the policy carefully or asking your insurer directly.

What isn't the same as liability insurance

It's easy to mix up different types of cover. To keep it clear:

What it is	What it isn't
AL liability insurance (mandatory)	Multi-risk home insurance
Covers damage to guests and third parties	Covers damage to the property itself
Required by the AL legal framework	Required by your bank or condominium

You can hold both — and in many cases it makes sense to — but they're different products serving different purposes.

How to check you're actually covered

Three questions to put to your insurer:

1. Does the policy explicitly cover alojamento local activity? Ask for written confirmation.
2. What is the insured sum for civil liability? Compare it against the legal requirements applicable to your AL type.
3. Are there any exclusions that could affect guests or commercial activity? Read the specific conditions, not just the general ones.

If the answer to any of these is vague or negative, that's your cue to review the policy.

Documentation: the detail that makes the difference

Having the insurance is half the job. The other half is being able to prove you have it — and that it was valid — at the moment it matters.

Always keep:

• The full policy (general and specific conditions)
• The most recent premium receipt
• Any correspondence from your insurer confirming AL cover

In the event of an inspection or a claim, this is the documentation that counts. Insurance you can't prove you have is, in practice, insurance you don't have.

Renewals: the silent risk

Policies renew annually — and that's precisely where many hosts find themselves unprotected without realising it. The policy lapses, a direct debit fails, the insurer changes the terms. Without a system to flag it, you only find out when it's too late.

Keeping a centralised record with the renewal date and an advance reminder is one of the simplest ways to avoid gaps in cover. It's not bureaucracy — it's basic risk management.

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Liability insurance isn't the most glamorous part of running an AL. But it's one of the areas where the consequences of getting it wrong can be most serious — for your guests and for you.