Insurance Companies Are Responding to Uber-Style Ride Sharing Businesses

Entrepreneurs who are starting a business or operating an established business that relies upon drivers using their own vehicle should take caution. Insurance companies are taking steps to ensure that individual drivers’ automobile insurance does not provide coverage when the personal vehicle is being used for commercial ride sharing.  Generally speaking, a private individual with the usual automobile insurance policy is subject to a commercial use exclusion. This means that if that individual is using his or her vehicle for business purposes (and getting compensated for the use of the vehicle) that an accident or liability that occurs during that use will be excluded from coverage.  Insurance carriers are now modifying language in automobile policies to expressly exclude situations involving ridesharing for compensation, i.e. Uber and Lyft.  If you own or operate a business where you rely on drivers who operate their own vehicle it is imperative that you check with your insurance agent to make sure you have the necessary coverage. It can save you tremendous headaches and losses down the road.

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