Drivers at Risk: Why Delivery Apps Might Leave Clients Without Coverage
Why Delivery Apps Might Leave Clients Without Coverage
Just a few years ago, a grocery run or a run to Chick-fil-A was to get something you needed and bring it home. These days, it seems like a run anywhere can include a detour to help someone else. When you’re headed across town, you might turn your Lyft app on, letting them know you’re available for a ride or two. While you’re looking for something to calm that mid-afternoon snack attack, you might log in with Uber Eats and make a delivery, snacking along the way.
That might create an issue for an insurance consumer’s personal auto policy. Ok, it does create issues. The ISO Personal Auto Policy has a couple of exclusions that address these issues.
We do not provide Liability Coverage for any “insured”:
5. For that “insured’s” liability arising out of the ownership or operation of a vehicle while it is being used as a public or livery conveyance. This includes but is not limited to any period of time a vehicle is being used by any “insured” who is logged into a “transportation network platform” as a driver, whether or not a passenger is “occupying” the vehicle.
a. A share-the-expense carpool;
b. The ownership or operation of a vehicle while it is being used for volunteer or charitable purposes; or
7. Maintaining or using any vehicle while that “insured” is employed or otherwise engaged in any “business” (other than farming or ranching) not described in Exclusion A.6.
This exclusion (A.7.) does not apply to the maintenance or use of a:
a. Private passenger auto;
b. Pickup or van; or
c. “Trailer” used with a vehicle described in a. or b. above.
There isn’t (as of right now) an endorsement to provide coverage for the person driving for DoorDash, UberEats, or any of those other delivery services.
The latest edition of the unendorsed ISO Personal Auto Policy (PP 00 01 09 18) gives us two clear exclusions related to what the customer is doing.
Commercial Exposures
ISO published and filed two endorsements to address transportation network drivers. (PP 23 41 09 18 and PP 23 45 09 18) but we are going to look at just one of them; PP 32 41 09 18 Transportation Network Driver Coverage (No Passenger).
Without diving into the form, we realize from the title there is likely to be a coverage gap related to the passenger.
Exclusion A.5. is replaced by the following:
We do not provide Liability Coverage for any “insured”:
5. For that “insured’s” liability arising out of the ownership or operation of a vehicle while it is being used as a public or livery conveyance. This includes but is not limited to any period of time a vehicle is being used by any “insured” who is logged into a “transportation network platform” as a driver, whether or not a passenger is “occupying” the vehicle.
This exclusion (A.5.) does not apply to:
a. A share-the-expense carpool;
b. The ownership or operation of a vehicle while it is being used for volunteer or charitable purposes; or
c. The ownership or operation of a vehicle during any period of time such vehicle is being used by an “insured” who is logged into a “transportation network platform” described in the Schedule or in the Declarations as a driver and a passenger is not “occupying” the vehicle if:
(1) Such vehicle is described in the Schedule or in the Declarations; and
(2) A specific premium charge indicates that coverage under this Part is provided for such vehicle.
The endorsement provides a schedule so the insured can know what coverages they have on this endorsement. If there is a premium shown for liability, medical payments, uninsured motorists, and collision, this endorsement provides those coverages while the insured has their Lyft app running. Notice it continues to exclude coverage when there is a passenger in the car. At that point, the transportation network’s coverage will pick up the exposure.
Did you notice we’ve only dealt with drivers picking up passengers because of an app? This endorsement doesn’t mention anything about drivers making deliveries. Unfortunately, this personal auto policy still includes a business exclusion. So, there isn’t (as of right now) an endorsement to provide coverage for the person driving for DoorDash, UberEats, or other delivery services. I’d watch for something to come for this exposure, but until then, the person delivering your McD’s might not have any insurance while zipping your way to deliver hot fries.