Insuring the Gig Economy
Andrew Biscay, South Lake Agency Inc
Platforms like Uber and AirBNB are becoming an increasingly popular way to get around or form of lodging when traveling. As the demand continues to soar, they're also a great way to make some money on the side, or as a full time job due to their ease-of-use and flexible schedules for "gig workers," the independent contractors who make up the workforce behind this growing trend.
The 2020 pandemic has pushed this sector to new heights when factoring in the surge in delivery demand as well as unemployed Americans looking for work. It is estimated that over 50 million people in the United States are independent contractors of some form, and 15% of all workers would consider that their primary source of income.
While the IRS and companies like Uber, Lyft, AirBNB, Amazon Flex, DoorDash, GrubHub, and more continue to hammer out their differences, one thing is clear: there are massive insurance coverage gaps involved.
Many people take out a personal homeowners or auto insurance policy and assume that there is coverage for any trouble that comes their way, unaware that their policies usually have exclusions for commercial use. For example, if you're making a paid delivery while in your personal vehicle and have an accident, the carrier would typically deny the claim if you only had a traditional personal auto insurance policy.
Luckily, many carriers are quick to adapt to changing trends and have offered endorsements you can add for a small fee to help fill in coverage gaps while using your car or home for gig economy work. We typically recommend also checking with the company you're working for to see what insurance they offer while you're working. In some cases, it might be also recommended that you carry a separate commercial policy. This would include different commercial categories like commercial auto, workers compensation, general liability, or professional liability.
Finally, we always suggest checking in with your insurance agent to make them aware of the work you're doing to avoid a potentially costly coverage error. Agencies like South Lake Agency can shop 20+ different companies to find the best rate and coverage to fit all of your needs.
Andrew Biscay is the founder & president of South Lake Agency Inc- a brokerage firm specializing in commercial and personal insurance based in Minnesota. He can be reached at firstname.lastname@example.org with questions or comments about this article.