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© 2020 by Ross Nesbit Agencies

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Insuring the Sharing Economy

Just like software as a service (SaaS) is becoming a larger and larger part of the computing world, technology is also bleeding into our day-to-day lives. People arrive at the airport, take an Uber or Lyft to their Airbnb that they rented for the weekend, and have some food delivered from Uber Eats, Door Dash, Grubhub or the dozens of more localized options. Just think about the implications of that. The sheer layers. What often doesn’t come to mind is the fact that the people who are behind these services—meaning the drivers and homeowners—are utilizing their personal assets as part of their business. By doing that, they are often forfeiting their ability to apply their personal insurance to those assets.

So what do these people do? Well, some of these companies provide insurance for their users, depending on the circumstances. Airbnb, for instance, provides free liability insurance up to $1 million to handle personal injury or property damage claims levied against their hosts. Of course, what a company is willing to cover and what you may need covered aren’t always going to match up. Not only does it vary from state to state, but it can also vary from company to company. Even Lyft and Uber don’t provide the same types of coverage for their drivers.

The one thing that is certain is that your personal insurance policy isn’t automatically going to cover you should you opt to use your personal assets for your business. Don’t take protection for granted. Depending on your state, you might need additional insurance to ensure coverage. Fortunately, there are more and more options on the market to help people in this situation. Many companies have commercial lines available specifically designed for short-term vacation spots (such as Airbnb would provide) or for ride-sharing situations like Lyft or Uber.

The takeaway? Not all is lost. The market is becoming more and more complex, but right along with that complexity are coming flexible coverage options specifically designed for these changes. Not only should you consider checking with the company you are doing work for (Uber, Lyft, Airbnb, etc.) but you should also double check your own personal insurance policies and strongly consider seeking the advice of a professional. After all, it’s better safe than sorry. Most people aren’t driving for Uber because they have new car money to throw around after being denied coverage.