The guide follows the launch of a Government review into the sharing economy and a meeting held between BIBA, 10 Downing Street and the sharing economy companies to find ways to overcome potential insurance issues that could prevent growth in the sector.
It provides clarification on insurance issues to ensure that adequate protection is in place and reduces the risk of businesses and individuals invalidating policies or being inadvertently uninsured.
The guide looks at the potential confusion around lift sharing scenarios where a motorist would need to add ‘business use’ to their policy if they share a commute with a colleague who is collected from a different location, where they might need special ‘hire and reward’ cover if they make a profit for a shared journey. It also looks at whether a property owner would need a specialist short-term landlord policy if they are renting out a room in their home.
Within the guide, a key challenge identified is that it is difficult for sharing companies to obtain insurance for themselves or their customers because they do not own the items being shared. Insurance brokers are identified as the key to accessing insurance and are in the best position to find new solutions to cover these risks.
BIBA has also identified some of its member insurance brokers who have put themselves forward to support the insurance needs of the sharing economy.
Graeme Trudgill, BIBA’s Executive Director, said:
”To use the item, but not to own it in many cases, presents unique challenges to the traditional insurance industry. BIBA members have been approaching insurance markets and can use their expertise in risk management to work with sharing economy businesses to find ways to reduce the risk.”
Matthew Hancock MP, Minister for Business, Enterprise and Energy, commented:
“There is huge economic potential for the sharing economy and I want to make sure that the UK is a world leader. An estimated 25 per cent of UK adults are already sharing online and getting a slice of £9 billion in global revenues – we are backing these everyday entrepreneurs and it’s great to see the insurance industry responding quickly and developing new products to support them too.”
Debbie Wosskow, CEO of Love Home Swap, is leading the independent review for the Government and has made recommendations as to how the UK can take the lead in this fast-growing economy.
She said:
“I’m delighted to see the launch of this new insurance guide and recommended broker list – global firsts for the sharing economy. Insurance has been a key focus of my government review, as many peer-to-peer businesses have had real challenges putting in place products to protect consumers. This is a big step forward to help with that process, as the sharing economy becomes more and more part of the mainstream.”
In the UK alone the sharing economy is estimated to be worth £500million, and is growing at 25% per year.
Emma Bate, Partner DAC Beachcroft, commented:
"The sharing economy is another new frontier for the insurance industry. Although it may take a little time, I'm certain that insurers and brokers will see the opportunities and find inventive ways to provide the insurance cover needed. Advice from brokers, as experts in risk management, can only be helpful to these fledgling businesses."
