Known by a number of names such as collaborative consumption and the shortened version, shareconomy, the sharing economy is still in its very early stages. As a result, there is still a great deal of concern as to how they can afford professional protection against risk. However, before looking at what type of protection might be needed and how to go about finding it, the first thing you should understand is whether or not your line of ‘work’ would be considered under the umbrella of collaborative consumption services or products.
What Exactly Is the Sharing Economy? A very brief definition would tell you that the sharing economy is peer-to-peer based. It is when private individuals share their resources or talents for an on-demand price. Perhaps the best way to describe shareconomy would be to give the example of Uber. Not quite a taxi service but acting like one, private individuals offer rides for a fee, much less the cost of a taxi service but providing the same type of rides. The driver has his or her own vehicle so Uber doesn’t cover the cost of insurance and this is where the problem lies. Uber does have insurance but it is unclear as to just who is covered and under what circumstances. Many fear that this leaves the door open to a number of lawsuits. So who is there to protect the driver? That’s a very good question.
Slice Offers an Innovative New Type of On-demand Insurance Coverage: A brand new insurance company, Slice, is set to launch in June of this year. It is not yet determined what market or markets Slice will begin in, but they are going to be writing on-demand insurance coverage, although they won’t be that actual insurer. In other words, they won’t carry the risk. “Our product — we price it, we issue it, we bill, we manage claims, but we’re not taking risk,” Tim Attia, co-founder and CEO of Slice Labs said in a recent article for TechCrunch. “We’re writing on somebody else’s policy, on somebody else’s paper. We’re doing everything an insurance company does minus the investing.” This particular type of insurance will provide coverage similar in scope to commercial liability insurance but will not be nearly as expensive.
How This Insurance Is Designed to Work: Those peer-to-peer tech workers needing coverage will not be charged a high-priced annual cost but rather will pay for insurance only as they need it. For example, an Uber driver will be covered from the time he/she picks up a ride until that ride reaches the destination. In between, the driver’s private insurance is in effect but once the passenger gets in the vehicle, the ‘commercial’ type of liability coverage begins. It’s an innovative product designed to fill in the cracks between the commercial and private use of the vehicle.
With more and more people striking it out on their own, the sharing economy provides a cost effective way to provide products and services to peers at a much lower cost than they would be charged from a business. The peer is technically just a worker and as such, doesn’t need to open a corporation. The services are provided under the umbrella of a company such as Uber, so that leaves him or her in a state somewhere between a company and a private individual. Who will protect them against loss or liability? Slice is one company that is set to pick up the slack between commercial and private insurance. It will be interesting to watch how this develops.