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Ridesharing companies such as Sidecar, Lyft, and Uber (aka UberX) have emerged as practical alternatives to traditional taxi and on-call limo services, primarily due to their lower costs when compared with taxis and their user-friendly application interfaces. Questions have been raised regarding liability insurance coverage for rideshare passengers and for those involved in an accident with a rideshare vehicle. In this post, we’ll take a look at how one rideshare service, Uber, has handled this issue.
Uber (Raiser LLC, and its various subsidiaries in each state where it does business) does carry liability insurance coverage for its drivers, but that insurance coverage is only in force under certain conditions as explained below.
Uber Liability Insurance Coverage
Uber’s Certificate of Liability Insurance is issued by Aon Risk Insurance Services West, Inc. of San Francisco as brokers for James River Insurance Company of Richmond, VA. According to the certificate, Uber rideshare drivers are insured for the following amounts under two distinct situations:
1) While the driver is logged into the UberPartner application, is available to receive pickup requests, but is not transporting a passenger.
Bodily Injury (Per Person) $50,000
Bodily Injury (Per Accident) $100,000
Property Damage (Per Accident) $25,000
2) While the driver is logged into the UberPartner application, has accepted a rideshare request via the UberPartner application, and is en route to the pickup address or transporting the rideshare passenger to the final destination.
Combined Single Limit (Each Accident) $1,000,000
Uninsured / Underinsured CSL $1,000,000
Note that in order for the Uber insurance policy to be in effect the Uber driver must be logged into the UberPartner application and thus available to accept rideshare requests. If the driver is not logged into the UberPartner application or if the requesting passenger has cancelled his or her ride request, the driver is covered by the driver’s personal auto insurance only. The Uber policy also does not cover damages to the Uber driver’s vehicle.
Is Uber a Taxi and, if not, just what is it?
Uber et al have been the subjects of derision by taxi companies because they aren’t taxi companies and are thus exempt from complying with existing regulations. While taxi companies are usually regulated at the state level, most states have legislation or administrative law rulings that consider rideshares to be a new creature known as a “Transportation Network Company” or “TNC.”
A TNC allows a driver, who is considered an independent contractor, to use his or her private vehicle to transport passengers for a fee so long as the passenger uses software provided by a rideshare service such as Uber or Lyft and the TNC driver does not accept “curbside hails.” TNCs usually furnish liability insurance for their drivers or make it available for purchase at low rates. The TNC is also responsible for conducting a Department of Motor Vehicles (DMV) records check and a basic law enforcement background check to identify potential drivers who have prior DUI / DWI convictions or criminal records. There is, however, little available data on how many potential drivers are disqualified by these checks or how many drivers with criminal records manage to slip past such scrutiny. Such questions are of more than a passing interest.
Due to the brief history of TNCs as business entities, and the varying regulatory climates under which they operate, such issues as a TNC’s liability for the non-driving actions of its drivers has yet to be tested in the courts. It may be that a TNC could be held liable in a variety of situations where they now claim exemption based on a driver’s status as a contractor rather than an employee. Until such cases have passed through the appellate courts it is probably wise to consult with an experienced personal injury attorney when dealing with TNCs and their liability insurance carriers.