The on-demand workers entering the  economy increase sizably daily. In the US alone, over 45 million say they have worked or offered services in the on-demand economy.

Sharing is obviously well on its way to becoming the new buying. Wonderful, right? Yes, but there’s a caveat. Are these workers protected while working? I think it is fair to say the majority are not. It is also fair to say that most think they are covered. Why is that? The problem is two-fold: Most traditional insurance companies struggle to provide policies that fit the back-and-forth between being a person and being a business without being cumbersome and cost-prohibitive. Many sharing economy companies provide insurance coverage that is not all-inclusive for the task nor ride-insured, and those signing on don’t always understand their coverage. Hence, that is the reason most are not protected when many think they are.

So what is the solution? 

Let’s first address the need. Why do on-demand workers need insurance? Don’t personal auto insurance policies cover the driver when the rideshare company doesn’t? Don’t homeowners’ insurance policies cover homes during the occasional weekend rental? A major problem caused by short term rentals of one’s home or apartment is that most insurance policies are invalidated by the use of residential property for a commercial purpose--especially if you are renting your place in a homeshare setting. The same is true when using one’s car for rideshare. And, interestingly, there are numerous varieties of on-demand worker opportunities; many kinds of companies and as many stories. Studies show that a large portion of on-demand workers do it part time and are looking to supplement their income, which in many cases may only be several thousand dollars a year. But some are full time and all are taking an outsized risk.

Meet Colin. Colin is a busy rideshare driver earning roughly $35k per year. His personal auto policy has a $1M liability limit. Colin picks up three passengers and gets blindsided by another driver who does not have insurance. All passengers are severely injured, including Colin, resulting in millions of dollars in damages. Per his understanding of the rideshare agreement, Colin contacts his personal insurance first. Colin’s insurance company denies the claim, stating the restrictions and exclusions for carrying passengers for a fee. It is now in the hands of the rideshare company to handle the claim. What if they deny the claim? He is not a Named Insured on the rideshare company’s policy and therefore has no rights under that policy. It is easy to see the millions of dollars of exposure is grossly disproportionate to $35K pay. It’s even easier to see how important proper coverage is.

So, back to the question – What is the solution?

How about insurance that is bought for the way we work? Insurance that is only provided when we need it? Consumers should be able to buy insurance for their needs, when they need it, all in real-time. They should be adequately and fully protected for the risk they are incurring during the time they’re incurring it. The only thing bigger than the on-demand economy is the risk--the achilles heel. Let’s take out the risk so the on-demand economy can continue to flourish.