The Risks associated with being an Uber driver:
In today’s fast moving technology driven society, sometimes individuals don’t have the time to stop and think about the risks associated with their personal or business decisions.
The goal of this site is changing that behavior – by informing consumers about the risks as well as insurance related solutions.
Technology
Today’s evolving technologies, such as Uber, are all being presented as a great opportunity for individuals to start a small business – which we believe to be true, we also hope everyone understands the risks associated.
According to the WSJ, Uber has 160,000 drivers in the US – we are not assuming all 160k don’t understand the risks associated with their own business. This is a large group who probably understand their respective exposures, but for the 10%-20% who might not have thought it through, here’s a list of some of the exposures by insurance product.
Automobile Liability
- Uber drivers are constantly transporting passengers to and from designated locations or events. The primary concern is the liability for transporting people.
- Uber services will operate on a year-round basis and will therefore face hazards associated with weather.
- Uber drivers may also will drive during hours of darkness, and also will encounter an array of electronic distractions (e.g., GPS systems, cell phones, etc.)
- Uber drivers will have a serious Automobile Liability exposure.
Auto Physical Damage
- Frequent traveling for extended periods and during inclement weather and hours of darkness may cause driver fatigue and possibly lead to accidents.
- The interior of the vehicle may be damaged by passengers.
- Vehicles may have to be stored outside, subjecting them to possible damage from various weather conditions.
- Therefore, Uber drivers will have a serious Automobile Physical Damage exposure.
Workers Compensation
- This is a debated topic, whether Uber drivers are employees or Independent contractors.
- At the time of this article, Uber drivers are independent contractors. As independent contractors and sole proprietors, it is up to individual owner operators to procure WC insurance in the event they are injured on the job.
- However, in the event that you have more than one Uber vehicle, or a hired driver, the Workers’ Compensation exposure will be significant.
- The most common hazards will include vehicular accidents, back injuries from lifting heavy objects (e.g., luggage), and slips, trips, and falls.
- Injuries related to robberies are limited due to the non-cash nature of the Uber platform.
- If the driver performs vehicle repair, maintenance, and/or refueling, the exposure will be increased.
Business Interruption
- Uber Drivers will have a slight Business Interruption exposure. The main exposure would be the loss of the vehicle, either in part or as a whole.
- Replacement vehicles can be easily rented.
- Location is usually less essential to the business than that of the loss of use, but could pose a problem if space for storing damaged vehicles is needed.
- Extra Expense coverage may be required.
How Insurance can help mitigate the Auto liability risks:
According to Uber’s website, Uber’s insurance coverage for ridesharing in the U.S. and Puerto Rico includes as of March 2016:
- $1 million of liability coverage per incident. Uber holds a commercial insurance policy with $1 million of coverage per incident. Drivers’ liability to third parties is covered from the moment a driver accepts a trip to its conclusion. This policy is expressly primary to any personal auto coverage (however, it will not take precedence over any commercial auto insurance for the vehicle). This policy has been provided since commencing ridesharing in early 2013.
- $1 million of uninsured/underinsured motorist bodily injury coverage per incident. In December 2013, Uber also added uninsured/underinsured motorist coverage. In the event that another motorist causes an accident with a rideshare vehicle and the motorist doesn’t carry adequate insurance, this policy covers bodily injury to all occupants of the rideshare vehicle. This is important to ensure protection in a hit and run.
- Contingent comprehensive and collision insurance. If a ridesharing driver holds personal comprehensive and collision insurance this policy covers physical damage to that vehicle that occurs during a trip up to the actual cash value of the vehicle, for any reason, with a $1,000 deductible.
- No fault coverage (e.g., Personal Injury Protection) is provided in certain states at similar levels as limos or taxis in those cities.
- $50,000/$100,000/$25,000 of coverage between trips. During the time that a ridesharing partner is available but between trips, most personal auto insurance will provide coverage. However, if the driver does not have applicable coverage, we maintain a policy that covers the driver’s liability for bodily injury up to $50,000/individual/accident with a total of $100,000/accident and up to $25,000 for property damage. This policy meets or exceeds the requirements for 3rd party liability insurance in every state in the U.S.
All UberBLACK, UberSUV, or uberTAXI rides are provided by commercially licensed and insured partners and drivers. Those transportation providers are covered by commercial insurance policies, in accordance with local and state requirements.
Thoughts
Please note, your insurance company may decline any claims or accidents while transporting passengers for money. A separate endorsement may be required by your carrier.
For drivers, please check with your current insurance companies to determine if and how your Uber risks are covered (if livery is excluded), as well as, how the Uber Insurance policy interacts with your policy.
Work with your agent or broker to notify your carrier about the new exposure.
Here is a list of companies that offer Uber or ridesharing coverage endorsements.
