5 insurance gaps companies miss with rideshare use
Photo by cottonbro studio
Many companies embrace rideshare platforms for employee travel. They’re convenient, scalable, and budget-friendly. However, they come with risks that are often hidden in plain sight.
Gaps in insurance coverage often go unnoticed until a costly claim arises. From poorly understood liability during driver “off-hours” to forgotten employee-owned vehicle risks, these exposures can cost businesses dearly if not addressed.
With so many layers of protection required for seamless coverage, small details often get lost. Let’s uncover the most commonly missed risks you need to fix now.
1. Understanding rideshare coverage gaps in driver activity phases
Rideshare insurance operates in three distinct phases: when the app is off, when a driver is waiting for ride requests, and during active trips. Coverage gaps typically arise during the “waiting” phase (Period 1), when many personal auto policies exclude coverage.
If an employee-driver gets into an accident while waiting for a passenger, their claims may fall outside both company and rideshare policies. This leaves businesses exposed to potential liabilities.
Ensure your policy extends coverage across all phases or confirm adequate protection through supplemental insurance options to avoid unexpected costs stemming from these gray areas.
If accidents do occur, you will also need specialist legal assistance to ensure that the right outcome is achieved. Experts like West Coast Trial Lawyers provide services tailored to ride share accident victims, so turn to them when worst-case scenarios unfold.
2. The overlooked risk of contingent liability
Contingent liability surfaces when a rideshare driver’s personal insurance refuses to cover damages, and the Transportation Network Company (TNC) policy only provides limited protection. With the rideshare market topping $54 billion, it’s a growing concern.
If an employee uses their vehicle for work-related rideshare tasks, businesses may find themselves responsible for damages not fully covered by either policy. This gap often surprises finance teams when claims arise from such scenarios.
Mitigate this risk by reviewing how contingent liability interacts with your corporate coverage. Adding endorsements or partnering with insurers who specialize in TNC exposures ensures accidents involving employee drivers don’t leave your company financially vulnerable.
3. Navigating workers’ comp challenges with TNC use
Workers’ compensation becomes murky when employees use rideshares during work hours. If an employee is injured in a rideshare accident, determining whether workers’ comp or the rideshare’s insurance covers the claim can be complex.
Some policies exclude injuries occurring during travel unless explicitly stated. Additionally, overlapping claims from personal health insurance may create delays in payouts or disputes between insurers.
Review your workers’ compensation policy to clarify its stance on rideshare-related incidents and ensure clear communication with employees about reporting processes for such accidents, thereby avoiding unnecessary complications and liabilities after workplace travel injuries.
4. Addressing UM/UIM exposures for employee riders
Uninsured (UM) and underinsured motorist (UIM) coverage gaps often go unnoticed in corporate rideshare use. If an employee is injured as a passenger in a rideshare accident caused by an uninsured or underinsured driver, the TNC’s policy may provide only limited compensation.
Businesses relying solely on these policies risk leaving employees inadequately protected, especially in severe accidents where costs exceed limits.
To close this gap, review whether your corporate auto policy includes UM/UIM provisions that extend to employees using rideshares for work purposes. Supplemental coverage can shield both your workforce and business from unforeseen financial consequences.
5. Employee-owned vehicle risks in rideshare policies
When employees use personal vehicles for rideshare tasks or work-related trips, their insurance may not cover commercial activity. Many personal auto policies exclude coverage if the car is used for business purposes, creating a serious gap.
This becomes especially problematic during incidents like accidents or theft, where neither the employee’s nor the company’s policies fully respond. The financial burden could fall unexpectedly on your organization, and even if you have adequate business insurance, coverage is not always guaranteed.
Address this by implementing a non-owned auto liability policy to extend protection to employee-owned vehicles when they are used for work purposes. Regularly communicate guidelines with employees to clarify proper usage and reduce these overlooked risks.
The bottom line
Insurance gaps in rideshare use often remain hidden until it’s too late. Proactively identifying these risks ensures your business stays protected from unexpected claims and liabilities.
From employee coverage to policy limitations, minor oversights can have costly consequences. Review your insurance strategy regularly to identify and close gaps, safeguarding both employees and finances during work-related rideshare activities.