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Northampton, MA 01060

Newsletter

3Mar. 2015

Learn From Uber - Get a Rider For Your Riders

Image source: Underscoopfire.com

Have you thought about how modern technology has co-opted many of our words?

To our grandparents, the “wireless” was a radio. A “mouse” was something you did not want in your house, never mind next to your computer. “Tweet” was something birds did until a few years ago. The “web” was a spider’s domain.

When I was a kid, if you had used the word “ridesharing,” I’d think you were using a fancy term for a carpool. Today ridesharing refers to livery services you can hire via an app on your smart phone.

Ridesharing services such as Uber, Lyft and Sidecar are turning the taxi industry on its head in cities across the country. The appeal is strong. If you want a ride, you can schedule it on your phone without making a call and you have no need to deal with a dispatcher like Louis DePalma (Danny DeVito’s character on Taxi). Payment is via your credit card on file, so you don’t have to worry about having cash either.

All three services reassure their drivers with a $1 million per incident liability policy to cover them in an adverse event. They have found a need to cover their drivers who use their personal vehicles on behalf of their companies because personal auto insurance policies exclude livery use.

While most employers don’t need to worry about their employees acting as a livery service on behalf of their company, questions do arise regarding insurance coverage for both the employer and the employee when an employee uses their own vehicle on company time.

As an employer, you need to have “non-owned” auto coverage to be protected against lawsuits that arise from an at-fault accident caused by an employee using their own vehicle on company time.

“Non-owned” coverage applies to anyone driving for the company in a vehicle that the company does not own and has not leased or hired. With this coverage, which comes as an endorsement or “rider” to your business auto policy, your company is protected up to the bodily injury or property damage limits on your policy. If your company does not own any autos and thus does not have a business auto policy, the coverage can be purchased as a separate policy, or is often added to a general liability policy.

The employee would also be named in this type of lawsuit and needs to rely on their personal auto policy for coverage. You could offer the employee additional protection by adding the “employees as additional insureds” endorsement to their auto policy. This would give the employee additional protection above the limits on their own personal auto policy.

If you have questions about your business auto policy and the protection it provides you or your employees, please contact our office.

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