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What to Beware in the Sharing Economy from Beall Financial & Insurance

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What to Beware in the Sharing Economy

Sep 20, 2016

Have you ever Ubered (or Lyfted)? Airbnb’d?

Have you thought about participating in the sharing economy from the service provider side?

Chances are good that you’ve had experience with a hosting or ridesharing service in one way or another—and you’re not alone. The “sharing economy,” of which these types of services are a part, is set to grow to $335 billion by 2025.

And it’s easy to see why. These types of services offer consumers lower prices and greater flexibility than their more established counterparts, taxi companies and hotels.

For service providers, companies like Uber or Airbnb may offer a simple way to boost income using tools they already have at their disposal (their own car, their own home).

The benefits are real for both consumer and service provider—but the risks are very real, too, and if you’re considering taking part in the sharing economy, you need to be aware of them.

For instance, what if your home is damaged during a stay by a sharing economy guest? Would that damage be covered by your homeowners insurance—even though your home was being used in a commercial manner at the time of the damage? What if you are involved in an auto accident while driving a sharing economy passenger?

If you are planning to join the sharing economy, consider these issues:

  • The company you sign up with may provide some insurance coverage for you (and then again, it may not!). How much is provided, and what sorts of claims does it cover?
  • Consult your insurance agent to check if the insurance provided you by the company will offer sufficient coverage if an incident arises. You may need to make changes in your homeowners, renters, or personal auto insurance so that there are no gaps in your coverage.
  • Contact your insurer to find out if there are any issues connected to renting out your home, or using your car for commercial purposes, which could impact your insurance coverage. Some questions to ask: if you are using your car as a livery service, will your current insurance policy offer sufficient coverage? If you are renting out your home, does it matter whether or not you are there at the time, or how many people are renting it?
  • Does your insurer consider renting out your home as a business use?

The insurance industry is still developing ways to support service providers in the sharing economy. Until a complete solution is available, work closely with your insurance agent and insurer so you don’t experience any coverage gaps if an insurance claim should arise in the course of your work.

Beall Financial and Insurance Services has been working with business-owners for more than 25 years to help them protect their most important assets, and their companies’ future. If you have questions about insurance coverage for your business, contact us.

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