Scotland Short-Term Let Licence Insurance Requirements
Every short-term let in Scotland needs a licence from the local council, and two of the mandatory licence conditions are about insurance. Under Schedule 3 of the Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2022, the host must keep valid buildings insurance for the whole period of the licence, and valid public liability insurance for the duration of every short-term let. "Valid" is the key word: a standard home or landlord policy that excludes paying guests may not be valid for short-let use at all, which would put the host in breach of the licence as well as uninsured. The other conditions, covering fire, gas and electrical safety, legionella, occupancy and repair, are also what insurers check at claim stage. Miller & Partner arranges short-let buildings and liability cover for licensed Scottish hosts, including properties mainstream insurers decline.
Key facts at a glance
- All short lets in Scotland need a licence. Existing hosts had to apply by 1 October 2023.
- Buildings insurance is a mandatory condition for the full duration of the licence.
- Public liability insurance is a mandatory condition for the duration of every let.
- The cover has to be valid for short letting. A policy that excludes paying guests doesn't meet the condition in practice.
- Operating without a licence is a criminal offence, with a fine of up to £2,500.
- Safety conditions double as insurance conditions. Missing certificates can hurt you twice.
What insurance does a Scottish short-term let licence require?
The order doesn't set a minimum public liability limit. In practice, £2 million is the floor most hosts start from and £5 million is increasingly common, particularly for larger properties, hot tubs or group bookings. Some councils and platforms ask to see evidence of cover; keep your schedules to hand.
Does my home or landlord insurance meet the licence condition?
Read the policy's occupancy definitions and exclusions. Look for wording about business use, paying guests, holiday letting or lets of less than a set period. If short letting isn't expressly covered, ask the insurer in writing or move to a short-let policy. Our Airbnb and short-let insurance page explains what a proper policy includes.
Which licence conditions affect insurance claims?
| Licence condition | What it requires | Why your insurer cares |
|---|---|---|
| Fire safety | Suitable fire and carbon monoxide detection | Fire claims are examined for alarms and cause |
| Furnishings | Records showing upholstery and mattresses meet the 1988 fire safety regulations | Non-compliant furniture can affect a fire claim |
| Gas safety | Annual inspection of pipes, flues and appliances | Gas and carbon monoxide incidents lead to liability claims |
| Electrical safety | Inspection at least every five years, an EICR and portable appliance testing | Electrical fires are a leading cause of property claims |
| Legionella | A risk assessment for the water system | Guest illness claims fall on the liability section |
| Occupancy | No more guests than the licence allows | Over-occupancy can affect liability and damage claims |
| Safety and repair | Reasonable steps to keep the premises safe, and the repairing standard where it applies | Poor maintenance is a common reason claims are reduced |
The licence also requires copies of the gas safety report, electrical report and appliance testing report to be available to guests on the premises.
What happens if I let without a licence or insurance?
Insurance proposals for short lets increasingly ask whether the property holds any licence it needs. Answering accurately matters: a property let without a licence it needed, or in breach of its conditions, is the kind of fact that comes out after a loss. Our guide to policies voided for non-disclosure explains the consequences.
What cover should a Scottish short-let host have?
- Buildings at full rebuild value, with short-let use accepted. Mandatory under the licence.
- Public liability for guest injury and damage to guests' property. Mandatory under the licence.
- Contents and furnishings at replacement value.
- Guest damage, accidental and malicious.
- Loss of booking income while the property can't be let after insured damage. See business interruption insurance.
- Employers' liability if you employ staff. A legal requirement in its own right.
Rural, thatched, listed and non-standard properties are common in Scottish holiday letting and often need specialist markets. This is where the Insurability Framework™ helps: we present the property, its licence and its safety records together so underwriters can price it properly.
How do I get insurance that meets the licence conditions?
- Check your current policy wording. Look for exclusions on paying guests, holiday letting or business use.
- Confirm who insures the building. Yourself, or a block policy for a flat. Either way, short-let use must be accepted.
- Arrange public liability for every let. Check the limit fits the property and the guest numbers.
- Gather your safety records. Gas, electrical, appliance testing, fire and legionella, which serve both the licence and the insurer.
- Keep evidence ready. Store policy schedules with the licence so you can show both on request.
Frequently asked questions
Yes. The mandatory licence conditions require valid buildings insurance for the duration of the licence and valid public liability insurance for the duration of each let. They apply to every short-term let licence.
The licensing order doesn't set a minimum. Most hosts carry at least £2 million, and £5 million is increasingly common, especially for larger properties, group bookings or features such as hot tubs.
Only if it expressly covers short-term letting to paying guests. Most home policies exclude it or need it declared and accepted. A policy that excludes the let is not valid cover for it.
Usually the block or common policy arranged by the factor or owners. You need to make sure that policy is in place and accepts short-let use, because the licence condition still applies to you.
Insurance is a mandatory licence condition, and councils can ask for evidence. Keep your policy schedules with your licence documents so you can produce them quickly.
Operating a short-term let without a licence is a criminal offence, with a fine of up to £2,500. Breaching licence conditions can lead to a fine and suspension or revocation of the licence.
Yes. Home sharing and home letting are both licensable types of short-term let in Scotland, with their own licence types. The insurance conditions apply to them too.
Yes. Specialist markets will consider it when the refusal, the property and its safety records are disclosed in full. See our guide to short-let insurance after a refusal.
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