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.
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.
What could go wrong
Insurance to consider
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
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.
* Fire in warehouse is a true event
The device your rider is on "fails" mid-ride and the rider is injured
Personal Accident Insurance and General/Public and Product Liability Insurance.
The rider is not concentrating and injures themself.
* A regular event
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.
Contractors/employees are moving devices between locations including to and from your warehouse.
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.
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.
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.
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
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.
Most policies will have an alcohol and/or drugs exclusion in the policy wording. If this is the case then:
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.
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.
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.
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.
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.
Types of 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.
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.
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.
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.