Recently, InsuranceThoughtLeadership.com ran an article by editor Paul Carroll called “The Future of Mobility Takes a Surprise Turn.” It’s about the emergence in urban, particularly downtown, areas of “micromobility,” aka “scooter sharing.” Some vendors are making electric scooters available, one being a startup called Bird with reportedly has raised capital at a valuation of $2 BILLION. Another, Lime, has a valuation in excess of $1B. Both Uber and Lyft are experimenting with scooters.
I live in the Nashville, Tennessee area and the (mis)use of these scooters has been a high-profile news story. Visiting my son yesterday, the number of scooters flying by on sidewalks and streets created the appearance of a moving obstacle course. Paul’s article cites a Washington Post article about the number of people who are ending up in hospital emergency rooms as a result of scooter accidents, both operators and victims. That is almost certainly going to increase, creating an emergency and significant risk that must be managed. One way to manage risk is insurance.
So, what are the insurance implications? First of all, I have no idea what liability insurance these vendors provide, if any, for themselves or operators. I’m told that Nashville currently requires vendors to provide $1M-$2M in liability coverage for scooter operators’ liability to others, if true, a good idea given the discussion below. In this article, I’m addressing the operators’ and victims own P&C insurance policies. Since I can’t cite the precise language of every P&C policy in the marketplace, my observations will necessarily be generalized and hopefully spur inquiries by readers into what liability coverage, if any, is provided by the policies they sell.
Personal Auto Policies
Few, if any, unendorsed PAPs would provide liability coverage for vehicles with less than four wheels and those not specifically designed for use on public roads. Many policies expressly limit coverage to motor vehicles of the private passenger, pickup, or van variety. Medical payments, uninsured/underinsured motorists, and no-fault coverages MIGHT apply to someone struck by a vehicle designed for use on public roads, but that depends on the UM/UIM and no-fault statutes or case law in each state.
Homeowners policies vary significantly in how they treat motor vehicles, but it is probably safe to generalize that most of them will not provide coverage for vehicles that do not service a residence, are not designed to assist the handicapped, or otherwise are used off an insured location. In addition, most HO policies have fairly stringent business use exclusions and it appears that these scooters are sometimes used for business travel.
Personal Umbrella Policies
You’d have to RTFP your umbrella policy. Some may cover this exposure, while others don’t. A true, quality PUP might provide coverage but lesser excess-only policies are unlikely to do so.
Business Auto Policies
While the eligibility requirements of most BAPs are not as restrictive as PAPs, an unlicensed motorized scooter that is not subject to motor vehicle laws could conceivably meet the definition of “mobile equipment,” something that sends us a CGL policy….
Commercial General Liability Policies
Motor vehicles not subject to MV laws that are “designed for use principally off public roads” may qualify as “mobile equipment” and may, therefore, be covered under CGL policies. The $64,000 question is whether these vehicles are designed for use off public roads, regardless of how they are operated.
Needless to say, we have more questions than answers. Do the policies you sell cover these exposures? Are your customers asking about this?
Photo by Tim Evanson
While the users of electric scooters are largely adults or at least teenagers, younger children may be exposed to injury from such vehicles, not to mention many other things. I came across an interesting article addressing risk management issues involving toddlers that your personal lines customers might find interesting: