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Uber Trouble By Giving a Lyft

UberDon’t get yourself in Uber trouble by giving a Lyft for pay.  Ridesharing companies are an emerging opportunity for folks with a drivers license and a car to make a few extra dollars but carefully review the potential risks and rewards before signing yourself up as a driver or even a passenger for a ridesharing firm like Uber, Sidecar or Lyft.  Transportation network companies like these use smartphone communications technology to connect individuals who want a ride with drivers who are willing to give a lift for a fee. In addition to violating livery (taxi) licensing laws in many jurisdictions these drivers generally use their personal vehicles and intend to rely on their personal auto policies which invariably have livery and/or business exclusions written into the policy language.

Essentially this means that most Uber, Sidecar and Lyft drivers are operating without insurance protections and are gambling all their assets and all their future wages on whether or not they are involved in an accident.  Remember that an auto policy is intended to protect you not only from accidents that are your fault, but also from accidents that are the other guy’s fault when she/he is unknown (hit & run) or  unable (due to no or low insurance liability limits and limited assets to sieze) to pay for the injuries and property damage consequences.  The financial losses from auto accidents can easily exceed $100,000 or even $1,000,000 for serious accidents.

Our recommendation is to stay out of Uber trouble by avoiding these Lyft companies as a passenger and a driver unless you/your driver has secured adequate commercial livery insurance to cover such risks.

Are You Protected When You Have a Company Car?

Verify Proper Coverage Is in Place for Your Company Car

Many employers provide employees company cars. Oftentimes, the employee is told that he or she need not worry about the insurance issues for this car; the employer will handle all of that. But this advice may be shortsighted since coverage gaps can crop up that may impact the insured employee in unforeseen ways. Thus, consider passing on the following tips to your clients who may have company cars.

Company CarSince your employer provides you a company car, consider the following risk management recommendations.

  • Verify that corporate insurance is in place and that it provides primary coverage. Also, check the liability limits to confirm that they are adequate. Carefully adhere to any restrictions on personal use, including possible prohibitions of other drivers.
  • For company cars, the extended non-owned coverage—vehicles furnished or available for regular use (PP 03 06) or related endorsement can be attached to your personal auto policy to provide excess liability coverage for these types of vehicles. A key advantage of this endorsement is its broad protection for co-employees.
  • If you do not own an auto but do have personal auto exposure (e.g., company car, borrowing friends’ cars, etc.), you should purchase a personal auto policy and attach a named non-owner coverage (PP 03 22) or related endorsement. Note that this endorsement could also be necessary if you need to purchase a personal umbrella policy.
  • Consider a personal umbrella policy that provides first dollar coverage (no deductible) if you do not have a personal vehicle but only a company vehicle.

Get more personal lines insurance and risk management tips and ideas from IRMI.

Copyright 2013 International Risk Management Institute, Inc.

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