• Micromobility Insurance Explained

     

     

     

     

     

     

     

     

     

     

  • As a share operator, what insurance do I need?

    Micromobility Insurance is complex requiring specialist understanding.

     

    The e-sharing industry is very new, with many possible events placing operators at risk. As a share operator, it's essential to understand what types of insurance will protect you and under what circumstances.

    • Do you have the right insurance?
    • Do you understand what risks your business may face by failing to have the right insurance?
    • Do you understand your existing policy wording?  Most operators we speak to have not read their policy wording. We strongly suggest you read your policy wording in full and if in doubt about what clauses mean, ask your broker to explain.
    If reading your policy wording puts you to sleep, send it to us for a complimentary policy review.
     

    Below are some events which can happen. The events listed are real and have already happened to operators.

     

    This site contains general guidance only on insurance products available to you. Before you buy a policy, you should consider if the product suits your needs by reading the Policy Wording, in light of your personal circumstances.

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  • What could go wrong

    Insurance to consider

    Shipping devices

    Purchased 2,000 e-devices and shipping them from China to your place of operation. During transit, they are lost, stolen or damaged.

     

    There are high incidents of fires on vessels so it is quite possible your entire fleet could go up in flames.

     

    * Fire on a vessel is an actual event 

    Options

    Marine and Cargo or Freight Insurance

    Fire in warehouse

    You have a warehouse and regularly have your devices being charged or repaired on the premises. Fire breaks out and everything is destroyed.

    1. Fire was caused by a faulty battery
    2. Fire was caused by another reason not related to the device.
    3. Fire was caused by batteries overheating and the fire destroyed neighbouring properties as well.

    * Fire in warehouse is a true event 

    Options

    1. Faulty battery - Product Liability Insurance
    2. Other reason - Contents Insurance
    3. Faulty battery and property damaged - Product Liability Insurance as well as General/Public Liability Insurance ensuring the policy also covers property damage.
    We have seen a number of policies which exclude property damage or Product Liability, so please check your existing policy wording.

    Device failure

    The device your rider is on "fails" mid-ride and the rider is injured

     

    *True event 

     

    Options

    Personal Accident Insurance and General/Public and Product Liability Insurance.

    Rider "failure"

    The rider is not concentrating and injures themself.

     

    * A regular event 

    Options

    Personal Accident Insurance is a 'first line' of risk management. If the rider decides to seek damages for your negligence (even though you believe there was no negligence on your part), you will need General/Public Liability Insurance.

     

    Defence costs are going to be your biggest exposure i.e. defending yourself against the false claim. This will particularly be an issue if the rider hires a lawyer.

    Transporting devices

    Contractors/employees are moving devices between locations including to and from your warehouse.

    1. Devices are lost or stolen during transportation
    2. Contractor/employee injures themselves whilst moving the devices
    *Contractor injury true event 

    Options

    1. Self Insure or Marine Transit / Cargo Insurance
    2. In some countries you are required to have worker's compensation insurance or an equivalent form of insurance.  In many instances your General/Public Liability may well protect you, however your policy would need to be extended or have cover included for injury to your contractors or subcontractors.

    Rider injures a third party

    Your rider injures another person or another person's property as a result of their own actions. This incident is unrelated to a fault in the device.

     

    *True event 

    Options

    Rider Third Party Insurance is a 'first line of defence'. The injured party could however still make a claim against you as you are the owner of the device causing the damage. It will be important to have all the rider's details in the event of a claim so you can subrogate or recover the loss from the rider who caused the damage. Where the rider has no capacity to remedy the damage, the injured party will most likely require you to make up the loss in which case you will need General/Public Liability Insurance.

    Contractor's home burns down

    Your contractors charge and repair your devices in their homes. Fire breaks out and the property is damaged and people are injured.

     

    *True event 

    Options

    Product Liability Insurance may protect you in the event the fire was caused by a fault in the chargers or batteries.

     

    Many policies we have seen have complete product exclusions - which means you are not covered for damage by faulty products. If products are excluded in your policy, a claim may be denied by your insurer.

     

    It's important to ensure you have Product Liability Insurance to protect you.

    Poor maintenance

    A device is not picked up for maintenance as per the normal schedule and another rider rents it. This rider then has an accident resulting in injury.

     

    *Could easily be a true event 

    Options

    General/Public Liability Insurance and Personal Accident Insurance.

    Rider under influence of alcohol or drugs

    Your rider is under the influence of alcohol and/or drugs. Whilst renting your device they fall and injure themselves.

    1. In the fall they injure only themselves
    2. In the fall they injure another person
    3. In the fall they injure another person's property
    *True event 

    Options

    Most policies will have an alcohol and/or drugs exclusion in the policy wording. If this is the case then:

    1. Injury to self - The claim may be denied due to the exclusion.
    2. Injury to another person - Third Party Insurance, although it is likely the Third Party Insurance policy will also have an exclusion and the claim may be denied. 
    3. If rider damages a third party's property - Third Party Insurance, although it is likely the Third Party Insurance policy may have an exclusion and the claim may be denied.  Be aware the third party may still hold you liable.

     

    Parked devices

    1. One of your devices falls over on the footpath and a person trips over it and injures themselves.
    2. Your device is parked properly, exactly where it's meant to be in a designated area. A member of the public trips over it and injures themselves.
    3. One of your devices is left on a footpath and it catches fire, damaging surrounding cars and property.
    *True events 

    Options

    1. General/Public Liability Insurance
    2. Sadly, even though you did everything right, the injured party may still make a claim against you.  You will need General/Public Liability Insurance.
    3. Product Liability Insurance ensuring property damage is covered in the policy wording.  

    Rider hits a service dog

    A rider hits a service dog resulting in the owner incurring veterinary fees. The particulars of this story are the dog owner was at a protest rally and the rider deliberately ran into the dog as it was wearing a jacket with a message the rider didn't like.

    The matter is now in the hands of the police.

     

    *True event 

    Options

    If a claim was brought against you in circumstances such as these, it's likely your General/Public Liability policy would be the policy you would claim against. Your General/Public Liability Policy may protect you in defending your negligence. The costs of litigation are high in such matters especially if the injured party hires lawyers and the case goes to court.

    Frame snaps during ride

    A rider drives up a gutter and the impact snaps the stem/frame of the device resulting in a fall and injury to the rider.

     

    *True event 

    Options

    Personal Accident Insurance and General/Public and Product Liability Insurance.

     

    Rider rides wrong way

     

    The rider rides the wrong way in a one-way street, collides with a car resulting in severe injuries to the rider and minor damage to the car.

     

    *True event 

    Options

    Personal Accident Insurance and Third Party Insurance.

     

    You may also need General/Public Liability Insurance if you as the operator are named as a respondent to a claim by the third party and are required to defend a claim.

    Scooters stolen from warehouse

    You store your devices in a warehouse at night. In the early hours of the morning, thieves enter your premises, steal your devices and start selling them on e-bay. All of the devices had tracking devices so the bandits are caught however they still managed to strip and sell a number of the stolen devices.

     

    *True event 

    Options

    Most operators do not have insurance for this event. If you have Property Insurance, make sure your devices are covered for theft.

     

    If your lease requires you to insure the building and glass as part of your lease you will need Property Insurance.

     

    If you choose not to take out insurance, you will need to self insure events such as these.

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  • Types of insurance

    Self Insurance

    In the event you cannot obtain an insurance type, or where it is unreasonably expensive, or where you choose not to purchase insurance, you will be required to self insure. This effectively means you or your business carries the loss or costs associated with the event.

     

    Issues to be aware of...

    The insurance industry is challenged pricing risks in the micromobility industry. Some types of insurance are not available as insurers have no appetite for the risk. Some insurance types are also very expensive and unaffordable for a startup.

     

    Choosing to have no insurance is a dangerous decision to make - one which could result in loss of income and/or the closure of your business. In some countries directors may be held personally liable for the loss, resulting in a loss of personal assets to fund the litigation or settlement or the need to declare bankruptcy. This is why having appropriate insurance in place is so important to protect you and your business.

    General/Public Liability Insurance

    This is the most common type of insurance taken out by operators and is often required by cities in order to be awarded a contract or license to operate.

     

    General/Public Liability Insurance protects you in the event you are negligent in the operation of your business and this negligence results in harm to a rider or a member of the public.

     

    It generally requires the rider or member of the public to litigate and establish and prove your business was negligent. This type of insurance typically deals with personal injury sustained as a result of your business activities.

     

    Examples include:

    • Scooter left on a pathway and a member of public trips and hurts themselves.
    • Rider injures themselves during the course of using the device.
    Issues to be aware of...
    General/Public Liability usually requires the injured party to litigate...but not in all circumstances.
     
    If a rider has an accident resulting in injury to themself or others and there was no negligence on your part i.e. the rider was doing something "stupid", you may still find yourself defending an action.
     
    If a rider has an accident (and there was no negligence on your part) and the rider injures another person or damages their property, the rider may find themselves in a legal action with the injured person. The injured person may expect you to remedy the situation, especially if the rider has no insurance and no capacity to pay for the damage or injury.
     
    Also, General/Public Liability will generally not protect you in the event your device explodes causing damage to people or property. See Product Liability Insurance.
     
    Many General Liability policy documents we have seen in the e-sharing industry explicitly exclude product liability.

    Product Liability Insurance

    Product Liability Insurance protects against claims of personal injury or property damage caused by your devices/products during the course of business.

     

    In most countries around the world, you may be held liable for the "product" even if you haven't actually manufactured the product. If you import all or part of your device, the product liability may rest with you, the operator.

     

    Many operators do not have recourse against the manufacturers of their devices. This adds additional risks to your business and we strongly suggest you review any supply contracts you have with your manufacturers.

     

    Examples include:

    • Device left on the street and a battery explodes damaging property.
    • Device left in a warehouse overnight and batteries explode destroying warehouse and injuring people.
    Issues to be aware of...
    Make sure your supply contracts have a right of recourse in the event the incident occurs as a result of a product fault and also ensure you have product liability covered in your policy.

    Personal Accident Insurance

    Personal Accident Insurance offers the first line of defence when dealing with riders who have had an accident and sustained an injury.

     

    Cover generally provides a lump sum benefit in the event of death or disability as well as weekly income protection for a set number of weeks after a waiting period. Additional extras may also include cover for broken bones and dental expenses.

     

    In the majority of incidents we have seen, there is no operator negligence. The incident happened due to a rider doing something stupid, riding over a bump or ridge in a road, or up a gutter, resulting in a fall.

     

    Whilst death and disability can occur as a result of rider negligence, the usual types of injuries are sprains, broken bones and chipped teeth.

     

    In an operator context, having Personal Accident Insurance allows you to quickly and efficiently deal with a rider's injuries, reducing the likelihood they will take action against your General/Public Liability policy.

     

    Issues to be aware of...
    Having Personal Accident insurance in place will assist you to manage the majority of incidents that occur.
     
    In most cases your rider just wants you to "hear their pain" and for you to respond in a professional and caring manner. Personal Accident Insurance provides the rider with a clear and transparent means to quickly receive benefits without resorting to litigation. People mostly resort to litigation when they don't feel heard or when they are poorly dealt with by a business.
     
    If the accident is a result of your negligence, a faulty device, or a cyberattack, the injured party may well still mount a case against your General/Public Liability or other insurance. In this circumstance, Personal Accident Insurance will not be enough.

    Rider Third Party Insurance

    Third-Party Insurance is designed to protect your rider in the event they cause injury to people or damage to property while using your device.

     

    In the share industry, a typical third-party risk involves a rider who injures a pedestrian, another rider or damages someone's property.

     

    Examples include:

    • Rider loses control and runs into a parked car and damages the car.
    • Rider drives into a pedestrian who falls and breaks bones.
    • A rider crashes into a cyclist who sustains an injury and damage to their bike.
    Issues to be aware of...
    Third-Party Insurance will generally only protect the rider when they are the ones at fault. If you as a business operator are at fault or negligent, the incident may be covered by your General/Public Liability policy. Please check your policy wording as many policies may not provide this cover.
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