Uber / Lyft Risks for Your Company and Employees

When was the last time you rented a car on a business trip? I never have. It is almost 2019. Cyber Monday is bigger than Black Friday, grocery shopping can be done online, and your likely reading this digitally. The world we live in is “on demand”. So, it’s not surprising ride sharing apps like Uber and Lyft dominate transportation needs, especially when you’re in an unfamiliar city. This technology is fantastic, but have you ever thought about what would happen if one of your employees was injured while “renting” an Uber or Lyft on a business trip? For starters, the scenario is a gray area. Ride sharing apps are innovative and have only been around for 10 years. Insurance companies aren’t usually seen as innovative, even if some have been around for hundreds of years.

What happens if your employee was hurt using a Ride Sharing App (Uber / Lyft) in a Driver’s vehicle?

First and foremost, Ride sharing App Users (in this case, your employee) are extended some coverage via the Corporate Ride Sharing company’s insurance policy.

Below is a direct excerpt from Uber’s Website. Read the full details a www.uber.com/drive/insurance.

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While a rider is in your car

When a rider is in your car, you have the same coverage as you do on your way to pick them up, plus the rider in your car is covered. You are covered by our insurance policy for three things:

  1. your liability to a third party,
  2. any injuries due to an uninsured or underinsured motorist, and
  3. collision and comprehensive coverage if you already have such coverage on your personal insurance

Third party liability coverage

This insurance covers your liability for damages to any third party such as the rider(s) in your vehicle, another driver, pedestrian, or property in case of an accident when you’re at fault. The coverage amount is at least $1 million of total liability coverage.

Uninsured or underinsured motorist bodily injury coverage

This insurance covers any occupant of your vehicle in case of an accident where another party is at fault but does not have insurance or is underinsured. This also covers hit and run accidents where the at-fault party cannot be identified. The coverage amount is $1 million of total coverage for bodily injury.

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So, while an employee is actively in an Uber they are covered under Third Party liability. Note however, the individual Lyft/Uber Driver is supposed to have coverage on their personal insurance. Well, what if they don’t? Or what if the individual Uber driver’s personal auto insurance has a ride sharing/livery service exclusion (which most do)? This can’t be relied on. What are users supposed to do? Read every auto insurance policy of every Uber they enter? Not practical.

Worker’s Compensation

Regardless of any auto related scenario, if an employee is hurt on company time, Worker’s Compensation should cover employees for work related injuries. Worker’s Compensation is designed as a no-fault coverage. Negligence doesn’t have to be proven. Worker’s Compensation doesn’t discriminate because the injury had a ride sharing app involved. It is designed to get the employee back to work as soon as possible. It provides four benefits; medical benefits, compensation for lost wages, rehabilitation, and can even provide death/survivor benefits. It is important to note Work Comp law varies by state. Insurance companies don’t mandate what’s covered in a policy, state law does. For readers in the four monopolistic states (OH, ND, WA, WY) coverage is purchased directly from the state. Since Ohio is home to many Technology First members, it is important to mention employer’s liability coverage (often referred to as Stop Gap insurance). This typically attaches to a company’s commercial package or business owners package policy.

Employer’s Liability Coverage

 This policy provides coverage for an employer’s liability where recovery is permitted by law for bodily injury arising out of and in the course of an injured employee’s employment that is not covered under workers compensation law. It can be thought of as an “umbrella coverage” that sits above Workers Comp insurance. Say an employee is hurt, goes and gets fixed up through workers comp, but that isn’t enough. They want more, they are still hurt, and there isn’t any coverage left in the Work Comp. So naturally, they go after the employer. Enter Employer’s liability insurance. It looks like this on your policy:

  • Bodily Injury by Accident $1,000,000 each accident
  • Bodily Injury by Disease $1,000,000 policy limit
  • Bodily Injury by Disease $1,000,000 each employee

Personal Health Insurance

Employees can also cut their losses in this scenario and just use whatever personal health insurance they have whether provided by the employer or not. Due to the rising healthcare costs in the U.S. it is likely many employees won’t be happy paying with this solution.

Alternative Coverages & Accidental Death & Dismemberment

Alternatively, a new start up called Sure Inc, offers a solution to be sure (no pun intended) insurance coverage is in place specifically when using a ride sharing app. Essentially, for less than $3 for a 24-hour period, Sure (underwritten by Chubb) will offer a Ride Sharing Insurance policy that includes $100,000 of Accidental Death & Dismemberment Coverage (AD&D) with a $10,000 medical expense coverage. I downloaded the app and it is straightforward. You just create an account and connect it to your Uber or Lyft account. However, if an employee breaks a leg in a car accident while using an Uber, that $10,000 may not be enough medical coverage.

More traditionally, companies can opt to offer various disability coverages alongside health care benefits. The most common coverages are short term disability, long-term disability, term life insurance, and AD&D. Accidental Death and Dismemberment (AD&D) covers in the event of a fatal accident or an accident that results in losing a major ability like eyesight, speech, hearing, or use of a limb. Dismemberment coverage works on a "per-member" basis. If you lose one member (a hand, foot, limb, sight in one eye, speech or hearing), the insurance company will usually pay 50 percent of the full benefit. If you lose two members, you receive the whole benefit. Corporate business travel policies are also available and are quite popular among multinational corporations. These policies simply bundle some the Life & Disability coverages above.

Regardless of the insurance or medical benefits passed onto employees by their employers, ride sharing apps still present a unique and unrealized risk when conducting day-to-day business activities.

Sources:

www.sureapp.com

www.uber.com/drive/insurance

www.irmi.com

www.insurance.com

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