The golden age of ridesharing companies may already be coming to an end. While services like Uber and Lyft remain profitable, the safety of their services continues to be a problem. Couple that with a lack of insurance for drivers and passengers, and liability becomes a very real, and very expensive, issue. As a result, many insurers stepped up to offer policies to these ridesharing companies. Liberty Mutual is the most recent company to do so.
Liberty Mutual will now provide coverage for Uber drivers and passengers throughout New England, South Carolina and Puerto Rico in 2020. Liberty Mutual is investing in a future where more sharing economy services like Uber and Lyft exist. The company created an entire unit that is solely dedicated to the sharing economy and new mobility risks. That unit created the program that Uber will begin using during the new year.
This new unit in Liberty Mutual is run Senior Vice President and Chief Underwriting Officer David Blessing. David spoke with the Insurance Journal about their recent partnership with Uber. “We drew on our competitive advantage of vast commercial and personal lines expertise, including our best-in-class claims and service organizations, to meet the specific risk management challenges facing the company’s ride-hailing and delivery operations,” Blessing said.
Liberty Mutual was quick to fill the gap created in Uber’s insurance services when their (now former provider) James River, announced that they were dropping Uber as a client. James River has publicly acknowledged that they mispriced their policies early on, which lead to them having to close that line of business.
Liberty Mutual seems confident that they will fare better than James River did when it comes to ridesharing policies. However, the new “gig” worker law in California could wreak havoc on the entire industry. Uber has already sued to block the law, but only time will tell if that pans out.