Transportation Network Companies (TNC’s) like Uber and Lyft have implemented new contingent liability policies after a major legislative battle forced them to their knees, but those policies still may be problematic for the insurance industry who demand more accountability from their drivers.
The contingent policy is exactly as it sounds – a policy that kicks in only if the driver’s personal auto insurance doesn’t foot the bill before picking up a passenger, but after the passenger is picked up, the TNC's policy becomes primary. Historically, though, auto policies have never covered accidents where the driver is performing commercial services, an underwriting provision known as the “livery exclusion.”
The exclusion came into question in 2014 when a San Francisco Uber driver, Syed Muzaffar, struck and killed 6-year-old Sophia Liu. The father sued, but Uber claimed no liability because Muzaffar “was not providing services on the Uber system during the time of the accident."
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