Approved in Parliament on 17th of July, the new local accommodation law entered into force on 22nd of October, fulfilling the 60-day period of being established in the diploma Diário da República. Although the law came into force in October 2018, not all provisions have immediate application – the law places a two-year moratorium for some of the new requirements, in the case of existing local accommodation units. Thereafter, all new registrations will have to conform to the new law, under penalty of heavy fines. Other changes to the local accommodation regime took effect two months after the publication in Diário da República.


Amongst a set of new rules, what stands out is that the new legislation obliges all operating owners to contract multi-risk insurance against civil liability. This will protect the owners from their assets and cover fire risk and property damage and non-property damage to guests and third parties. The owners also become responsible for the damages caused by the guests in common property or of third parties.

It should be noted that this Law – Law no. 62/2018 – contained some inaccuracies related to insurance, stating, in this regard, that the holder “must hold and maintain a multi-risk insurance of civil liability that protects him from his assets and claims in the scope of its tourist activity “.

Since the terminology of “multi-risk liability insurance” does not exist in Portugal, meaning, there is no correspondence in the technical and legal terminology of the insurance activity, a new revision of the Law was made, and now appears in Law No.71 / 2018, of December 31, as following:

Article 347.º

Article 13.º-A

Solidarity and insurance

1 – The owner of the local accommodation is jointly and severally liable with the guests for the damages caused by the latter in the building in which the unit is located (item no. 62/2018).

2 – The holder of the local accommodation must hold and maintain valid extra-contractual civil liability insurance that guarantees the property and non-property damage caused to guests and third parties, arising from the exercise of the activity of providing accommodation services.

3 – The minimum capital of the insurance contract provided for in the previous number is 75,000 € per claim.

4 – The other conditions of liability insurance mentioned in paragraph 2, namely the temporary scope of coverage of the insurance contract, the possibility of exercising the right of return, the exclusions of liability admissible or the establishment of deductibles that can not be third party or their heirs, are determined by order of the members of the Government responsible for the areas of finance and housing.

5 – In the case of a local accommodation establishment is integrated in a horizontal property, the owner is also obliged to contract or prove existence of valid insurance guaranteeing the property damage directly caused by fire in or originating from the accommodation unit.

6 – The lack of valid insurance provided for in paragraphs 2 and 4 is grounds for cancellation of registration.

Much of the currently active local housing will only be covered by a multi-risk housing insurance. Most of them include coverage for extracontractual civil liability, that is, it responds to damages caused to third parties who do not have a contractual relationship with the owner. In this context, tenants and guests are excluded, and remain in open. This was the scenario that the legislature sought to reverse, when it determined the obligation to cover, through insurance, any damages suffered by guests of local accommodation. But the law also obliges owners of local accommodation to cover any damage caused by their guests to the building where the tourist unit is located.

For all those who exploit local accommodation activity, Allianz Local Accommodation responds to the legal obligation for civil liability insurance, protecting your business until the check out.

This new rule, the contracting of civil liability insurance, has up to two years to be applied, but there are already many owners concerned with the matter, as they do not want to be in breach of the Law. Penalties for those who don’t have the insurance regulated as required by law is the cancellation of registration of local accommodation.


Local accommodation establishment unit integrated in a horizontal property

The units in the horizontal property regime are legally obliged to contract a Fire Insurance that guarantees the fraction and the respective permiliation in the common parts, according to Dec Law 267/94.

For those that are exploited as local accommodation, the law provides that the exploiter of the local accommodation is jointly and severally liable with the guests for the damage caused by them in the building in which the unit is installed. Thus, the client must contract and maintain a valid Local Accommodation Liability insurance that guarantees the property and non-property damage caused to guests and third parties in the scope of their activity. Finally, as the unit in question is integrated in a building under a regime of horizontal property, the exploiter is obliged to contract a valid insurance that guarantees the property damage directly caused by fire in or from the housing unit.

Property Damage coverage in Local Accommodation civil liability Insurance does not replace the mandatory Fire insurance for units of Horizontal Property. The Local Accommodation civil liability Insurance only guarantees damages to guests and third parties as well as property damage arising from fire in and originating from the unit of the operation of accommodation activity. Thus, for example, if a fire occurs, or any other occurrence in a period in which the fraction is not leased, the damages resulting from the accident will not be guaranteed by the Housing civil liability Insurance.

For further clarifications, don’t hesitate to contact us.


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