Uber/Lyft’s Corporate Policy
First and foremost, ride-sharing app users (in this case, your employee) are extended some coverage via the insurance policy of the corporate ride-sharing company (e.g., Lyft or Uber).
Uber’s guidelines provide that the insurance policy covers drivers for three things: (1) the driver’s liability to a third party, (2) any injuries due to an uninsured or underinsured motorist, and (3) collision and comprehensive coverage if the driver already has comprehensive and collision coverage on his or her personal auto insurance. So, although employees are riders in ride-sharing transportation, they may be covered under the third-party liability coverage.
However, this is at best an imperfect solution because there may be limitations on coverage. And, obviously, it is impractical for users to read every auto insurance policy of every ride-sharing car that they enter.
Regardless of any auto-related scenario, if an employee is hurt on company time, workers’ compensation likely is a source of coverage for employees for work-related injuries.
Workers’ compensation is designed as a no-fault coverage. Negligence doesn’t have to be proven. Workers’ compensation won’t discriminate if a ride-sharing app is involved with the injury. It is designed to get the employee back to work as soon as possible.
Workers’ compensation commonly provides four benefits: medical benefits, compensation for lost wages, rehabilitation, and death/survivor benefits. It is important to note, though, that workers’ compensation laws vary by state. Insurance companies don’t mandate what’s covered in a policy—state law does. For readers in the four monopolistic states (Ohio, North Dakota, Washington, and Wyoming), coverage is purchased directly from the state.
Employer’s Liability Insurance
Employer’s liability insurance 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’ compensation insurance.
This coverage can be a valuable recovery source when an employee is hurt and receives treatment through workers’ compensation insurance but continues to experience problems. Assuming that no coverage remains under the workers’ compensation program, employees often go after the employer in such a scenario. 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
In sum, this coverage allows companies to avoid defense costs and liability from claims by injured employees when workers’ compensation is insufficient.
Personal Health Insurance
Employees can also cut their losses and use whatever personal health insurance they have, whether provided by the employer or not. Due to the rising health-care costs in the United States, it is likely, though, that many employees won’t be happy paying with this solution. Moreover, the employee’s health insurer may be subrogated to the claims of employees, and so the company still may face exposure.
Alternative Coverages and Accidental Death & Dismemberment
Alternatively, several companies are offering unconventional solutions. For example, a new start-up called Sure Inc. offers a solution to be sure (no pun intended) that insurance coverage is in place specifically when a person uses a ride-sharing app. Essentially, for less than $3 for a 24-hour period, Sure (underwritten via Chubb) offers a ride-sharing insurance policy that includes $100,000 of accidental death and dismemberment (AD&D) coverage with a $10,000 medical expense coverage. The app is seamless and pretty straightforward. You just create an account and connect it to your ride-sharing account. However, depending on the extent of the injury, the coverage may be insufficient.
More traditionally, companies often 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 insurance. AD&D insurance provides coverage 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. AD&D 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 also are available and are quite popular among multinational corporations. These policies simply bundle some of the life and disability coverages mentioned above.
Regardless of the insurance or medical benefits passed on to employees by their employers, ride-sharing apps present a unique and unrealized risk when employees conduct day-to-day business activities. Thus, companies should explore various insurance products to ensure that they are minimizing their exposures.
Brian Mahon is an account executive at Keller Stonebraker Insurance, Inc. in Washington, D.C.