Summary: Ride-sharing has become quite a large factor in today's society. There are many ride-sharing companies, and states are trying to enact legislation for the companies to provide insurance, adhere to certain background check and other requirements, and the insurance industry has its own issues. See Ride-sharing and Car-sharing. ISO has developed an exclusion for such activities for the personal auto and personal umbrella form. Currently only Alabama, Iowa, Maine, Montana, North Carolina, New Mexico, Wisconsin, and Wyoming have adopted this umbrella form as of its effective date, October 1, 2015 and Colorado, Indiana, and Nevada are adopting it effective November 1, 2015. The form is DL 99 12 10 15, Personal Umbrella Liability Policy Public or Livery Conveyance Exclusion Endorsement. It is likely that other states will follow suit; the liability exposure with this activity is quite large.

Topics covered: Definitions Exclusions

Definitions

I.Definitions

The following definition is added:

“Transportation network platform” means an online-enabled application or digital network used to connect passengers with drivers using vehicles for the purpose of providing prearranged transportation services for compensation.

Analysis

Attaching to the DL 98 01, the Personal Umbrella Liability Policy, this endorsement adds the definition of “transportation network platform,” which is defined as an online-enabled application or network that connects passengers with drivers using their own vehicles for the purposes of providing a ride. This is how it works: an individual signs up with a transportation network company (TNC) such as Uber or Lyft and agrees to provide rides to others for a fee. Once approved, the individual has the ability to sign in digitally to an application on his cell phone and look for those seeking rides. Some TNCs set the fees and others allow the driver to have some say; the driver can agree to a price with the potential passenger and then picks up the passenger. It is similar to a taxi service except the online application makes it easy for drivers to find passengers and passengers to find drivers. This system skirts the entire taxi system, including the need for taxi licenses, medallions, commercial insurance, and regulations that taxis must adhere to. This creates a large liability exposure for the insured, as most personal auto policies exclude such livery service. Hence the exclusion that follows.

Exclusions