New exposures are on the horizon as the sharing economy model moves from the consumer space into the business-to-business (B2B) space. New applications are being targeted to the businesses class and business professionals, and these new offerings are likely to establish more formal relationships between organizations and service providers—thereby increasing the threat, but also increasing the opportunity for brokers.
Eric Silverstein, senior vice president and member of the National Casualty Broking Practice at Willis Towers Watson, said that the evolving risks associated with the sharing economy model raises the big question of liability, while additional complexities, such as regulatory issues, will create new legal challenges.
“This sector and its risks are certainly on the insurance industry’s radar, but so far the response has not been uniform,” he said.
“For example, an organization may be considering partnering with a rideshare program for business to save costs normally associated with car service and transportation. Or employees may be interested in using a home share service while travelling on business, rather than a company-approved hotel.
“While the appeal seems obvious, these types of scenarios can raise the threat level for organizations today. Regardless of convenience or demand, organizations’ primary concern should be for the safety of their employees,” Silverstein warns.
Before engaging these kinds of services, Silverstein advises that risk managers would do well to consider the following:
- Adopting clear corporate policies is the first step. Conduct a review of travel policies to determine if travel departments, travel service companies or software systems provide ride-share or home-share service options.
- Address the risks of employees’ utilizing ride share and home share services, and think about each risk separately. Consider that the policy may need to vary depending on whether the travel is domestic or international. Review contracts with travel service companies to determine whether liability can be partially transferred.
- Engage key stakeholders. Review the results with legal counsel and your insurance broker to determine whether it is necessary to make a statement with respect to travel policy.
- Review Workers Compensation, travel accident, auto, liability and management liability insurance coverage to determine whether policies should be endorsed to provide contingent coverage. In most cases, those policies will not exclude coverage however there may be options to broaden coverage or increase sub-limits.
Silverstein said that while the challenges associated with the sharing economy may still in their infancy, trends tied to technology and consumer behaviour tend to move rapidly and the risk management community needs to collaborate to get out ahead of this emerging risk and target emerging opportunities.
