The Sharing Economy: The New Insurance Frontier

The Sharing EconomyTransportation Network Companies (TNC), such as Uber and Lyft, serve thousands of riders daily by using a mobile platform to connect passengers with drivers and have grown rapidly since their formation in 2009 and 2012, respectively. Airbnb, founded in 2008, is an online marketplace for users to find peer-to-peer lodging accommodations around the world. These companies represent a budding new industry with a whole host of new insurance challenges.

Ridesharing operations have thrown a curveball to the taxi industry. With the disruption of their livelihood, the taxi industry has raised concerns about the legitimacy of the TNCs to states, municipalities, and other regulatory authorities. One of the main issues is insurance—personal vs. commercial, primary vs. surplus, and insurance limit requirements.

The peer-to-peer lodging marketplace raises similar concerns from the hotel industry and various regulators. Who is responsible when property is damaged? What if the guests are injured onsite? Who becomes liable? What, if any, insurance is triggered?

Appropriate policy form drafting is critical to ensuring that the proper coverage applies when there is a loss. Thorough claim oversight is also important to help the third party claims administrators handle coverage interpretation and settlement. Here at Old Republic Risk Management, our experience with active participants in this industry allows us to stay at the forefront of developing insurance issues and help determine the most appropriate insurance approach within the confines of the regulatory and legal environment. More importantly, we have an open dialogue with our insureds to better understand what their concerns are, how they are addressing the issues, and how we can help structure insurance programs that resolve them.

Regulation oftentimes trails innovation and it may take some time before all the unprecedented insurance issues are identified. One known fact is that the sharing economy is not going away. The sharing economy continues to grow and is expected to be a $330B industry by 2025. And we look forward to growing with them.

Helen Kim, Senior Vice President, Account Executive

Helen Kim is a Senior Vice President and a member of the leadership team at Old Republic Risk Management. She has responsibility for producing, underwriting, and servicing national account insureds interested in large retention casualty programs. Helen leads Old Republic's efforts in the Pacific West region.