This is the 4th pivot for Seesmic? Can early investors ask for their money back if the nature of the business changes from what they originally invested in?
Reminds me of how Burberry totally stopped using their signature tartan on the exterior of their clothing so they would stop being associated with chavs.
Besides liability for damages incurred by the guest, hosts are also probably on the hook for liability should the guest be injured (or worse) while staying in your place.
"There are a number of ways in which this reduces to an insurance problem."
You can't get insurance for an illegal activity.
If you're subletting your own rental apartment, or in a jurisdiction with laws against unlicensed short term rentals (like New York City no doubt one of Airbnb's biggest markets) renting out via Airbnb is most probably illegal and no insurance company on the planet will cover it.
Can you even get insurance on an illegal activity. It seems clear that many people on Airbnb are either illegally subletting their rental apartment or in places like NY where Airbnb is violating laws meant to stop illegal and unlicensed hotels.
I would bet dollars to doughnuts that a traditional holiday apartment will only be able to get insurance that is viable if they meet a number of criteria (removal of valuables, cheap furnishings, inspection etc) that would not be available to someone putting their primary residence up for piecemeal rental on AirBnB
Over time AirBnB will probably just become a listing and booking service for established holiday apartments. Places that are furnished accordingly, have suitable insurance and are properly managed by the owner or a agent.
Bringing amateur operators into a sector with potential massive downsides with no education is extremely risky for AirBnB and the hosts.