A gig worker is someone who makes their living outside the traditional, 9-5 full-time job with other sources of income. Gig workers are contractors, freelancers, and independent workers. They own their own businesses and may have several streams of income. Some gig workers earn their living through digital means, others do more physical tasks – and some do a combination of each.
Typical gigs include dog walking and pet sitting using platforms like Wag! and Rover; driving for transportation network companies like Uber or Lyft; taking odd jobs through platforms like TaskRabbit; or delivering groceries or takeaway meals with Grub Hub or Door Dash. Whatever the type of work they do, insurance for gig workers is an important consideration.
The gig workers who pick up jobs on these platforms are considered independent contractors – they do not get benefits or accrue paid time off from the companies that hire them. Some gig companies are beginning to face challenges in court to provide some measure of benefits to their gig workers, though. Uber and Lyft have rolled out changes in California to give drivers stipends for health insurance and guaranteed minimum earnings to continue classifying them as independent workers.
Because gig workers are generally independent contractors, there are some insurance products they should consider purchasing to protect themselves. The rise in gig work has lead to an increased need for coverage. Agents should ask their policyholders if they have started any side businesses or are doing gig work – many people start gig work in addition to their full-time position, so it may not be immediately evident that their insurance needs have changed.
Read on to learn more about how the increase in gig work leads to more demand for insurance coverage. There are more coverage resources available from the American Agents Alliance. Consider becoming a member today for full access to benefits like E&O coverage for California-based agents.
The Rise in Gig Work Leads to Increased Need for Insurance Coverage
There are several different insurance coverages gig workers should consider, depending on their risks and exposures. Agents should talk with their insureds and new customers to determine their needs and coverage gaps and make coverage recommendations accordingly. For example, you don’t want to find out after an accident that your new policyholder drives for Uber and isn’t covered for an accident they had while in between rides.
Insurance for gig workers doesn’t have to be complex, but you need to understand their changing needs as their agent. Gig workers may have many different types of jobs, which can complicate their insurance plans.
Commercial General Liability Policy
A general liability policy provides valuable protection for gig workers and freelancers. It is often a first policy purchase for many small businesses. Gig workers could also consider purchasing a CGL policy to cover their needs when first starting gig work. The general protections offered for property and liability exposures may be sufficient to cover many basic risks the gig worker faces. Consider adding specialized coverages depending on the type of work performed by the gig worker.
Auto Insurance Coverage
Gig workers who drive for transportation network companies like Uber and Lyft have special auto insurance needs. Car insurance for gig workers can have some unique characteristics. The companies provide some coverage for drivers that can work together with the driver’s personal auto policy. Uber has insurance coverage that applies in different ways depending on the timing of the accident. When a driver is offline or doesn’t have the app turned on – so they are not driving for Uber or looking for rides – the personal auto coverage would apply.
When a driver has a passenger in their car, or they have accepted a ride and are on the way to pick up the passenger, Uber provides some comprehensive and collision coverage, third-party liability, and uninsured/underinsured motorist coverage – as long as the driver also maintains their own personal policy.
Lastly, if a driver is waiting for their next ride and has the Uber app turned on, Uber provides some third-party coverage only – no first-party coverage is afforded in these situations. Because many personal auto policies exclude coverage for policyholders while they are driving for transportation network companies, the insured may have a coverage gap. A rideshare and delivery insurance policy can help fill this gap.
Agents should talk with their insureds to understand if they need rideshare coverage. Make it a habit to discuss at renewals and with new customers during their application process. That way, you can avoid missing this coverage gap and can advise your customer thoroughly.
Errors & Omissions Coverage
Many gig workers perform work where they may need liability coverage against claims of negligence or inadequate work. Gig workers on Fiverr, Upwork, and other platforms do jobs like website coding, graphic design, copywriting, and counseling, among others. This may be in addition to other tasks the gig worker is performing, or it could equal a full-time job.
These gig workers may want to consider adding E&O coverage to protect them from these types of claims. Agents can talk with their policyholders about the kinds of projects they take to determine if they may need an Errors & Omissions policy.
Umbrella Policy
An umbrella policy can provide protection above the underlying policy, so it can be a smart idea for many gig workers (and anyone with assets). A personal or commercial umbrella policy can afford peace of mind for a gig worker along with the additional coverage limits it provides. Talking with policyholders about their exposures and personal assets can help you determine if an umbrella policy is a wise choice.
Final Thoughts
Whatever type of gig work they perform, talking with your policyholders and new customers to determine their needs is critical – then you can help them fill gaps created by their gig work exposures. For more resources, check out our blog and become a member of the American Agents Alliance.
