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Sharing Economy – A bold new approach to Insurance for an emerging market

03 May 2018 - by Laura Gifford

The sharing economy, also known as the gig economy, is a revolutionary concept that facilitates transactions through online platforms to connect distributed groups of individuals and enterprises and enable them to share access to their assets, resources, time and skills on a scale that has not been possible before. Across the world we are seeing businesses attempt to capture a piece of the peer-to-peer, on-demand, collaborative marketplace which PwC estimates to be worth $335bn by 2025.

The sharing economy is disrupting the traditional two-party relationships and unfolding a new trust-based relationship involving tech-enabled platforms. We are getting in strangers’ cars, renting our homes to people we don’t know and borrowing luxury items. The result is increasingly blurred lines between which policy would respond, for who, and when. So how do you protect all parties should something go wrong?

At Price Forbes we are at the forefront of this growing market as it becomes increasingly mainstream, its short term nature throws a puzzling conundrum to risk management bringing to light several points for consideration:

  • How regulated is the marketplace?
  • Who holds ultimate liability in case of injury/accident/property damage?
  • How is the risk of personal items used for commercial use to be priced?
  • Is there enough loss history available to facilitate pricing?
  • Since individuals sign up as service providers on the platform, how are they liable?
  • Are exclusive/non-exclusive service providers eligible to employee benefit schemes as providers available on the platform?
  • In case of a cyber breach, what could exposures look like and which parties are liable?

We have a sharing economy practice dedicated to supporting and developing insurance programs for on-demand companies. Given our strong market standing and innovative approach as an independent London broker, we are able to find the necessary capacity to place your special and emerging risks by tailoring the breadth of coverage using manuscript policy forms unique to each client. Take, for example, a sharing-economy driver who occasionally works for a ride-sharing company and would rather pay for their insurance per-day. By providing such a policy which is designed to charge insurance only when the asset or resource is utilised we are creating insurance efficiencies.

We at Price Forbes want insurance to act as an enabler rather than a hindrance to our clients. With the majority of sharing economy businesses requiring external investment, investors look favourably upon those companies who have the support of the oldest and arguably most respected insurance market in the world: Lloyd’s of London. This credibility and confidence extends to the regulator, consumers and the business itself.

Given the sharing economy’s emerging nature, we understand that companies in this field are price sensitive. By combining coverages under one package we can help take advantage of economies of scale.

We welcome accounts of all size and nature. For further information contact one of our Sharing Economy practice experts by visiting our Sharing Economy webpage