With Electric Scooters Taking Over Urban Cities, It’s Important for Startup Owners to Understand Their Risks When Employees Use Them As Transportation…

Scooters are everywhere in urban areas all across the nation, and it does not look like they are going anywhere in Austin anytime soon. This month we discuss personal and business liability involved with riding an electric scooter.  Then we answer the more important question of how insurance will respond. As a bonus we also share a few key safety tips. 

 

Personal Liability

Have you read through the ‘Rental Agreement’ from your favorite scooter company? Most likely this is not something you have not referenced since downloading the app and taking your first ride. Here is a copy of one from Bird just in case you wanted to take a look: click here. The words following ‘Rental Agreement’ happens to be ‘Waiver of Liability and Release.’ To be clear, this means you are personally responsible for anything that happens on the scooter.  

The Insurance Council of Texas released a video regarding your personal liability when riding a scooter. Here are two key take away points from the video: You assume all liability and your personal insurance policies are NOT likely to respond. Click here to watch the video. 

 

Will My Personal Insurance Cover Me? 

The Insurance Information Institute wrote a blog titled, E- SCOOTER SHARING PROGRAMS: ARE YOU COVERED?  about this. According to the article, a Homeowners/Renters Insurance policy won’t cover self-propelled vehicles.  The logic is a personally owned vehicle should be covered on a personal auto policy. At the same time, the standard personal auto policy excludes liability coverage for a vehicle with fewer than four wheels. The only place an individual might have liability coverage is a personal umbrella. Everyone has one of those, right? [crickets chirping]  

 

But What About Business Liability? 

A question from business leaders that has not been fully answered is, ‘Am I covered if an employee hurts themselves or someone else while riding a scooter on company business?’ The likely scenario is a sales person going on a sales meeting in downtown Austin on a scooter. To be clear, this has not been fleshed out by carriers, claims professionals, or lawyers, but here a few places to look for coverage. 

 

Workers Compensation 

Since workers compensation is designed to be the sole exclusive remedy for all work-related injuries, it appears this is a starting point for employees injured in the course of their work. Workers compensation will not pick up coverage if the employee is injured on a daily commute, but it would likely pick up the medical bills and lost wages if injured while taking a scooter to a business meeting. 

 

Commercial Auto: Depends Upon What the Meaning of the Word ‘Is’ Is 

If you notice on Bird’s Terms of Use, they refer to the scooter as a ‘vehicle’. But how does an insurance carrier classify a scooter? In short, they don’t, but different carriers have different definitions of an ‘auto’ with room for interpretation. For example:

Despite not having a 4-wheel requirement, a commercial auto policy will likely decline a scooter liability claim since it can be argued that an electric scooter does not fit the definition or intent of the definition of an ‘auto’. It will also depend on state and city laws since in some cities scooters are not designed for travel on public roads. This is something to keep an eye on as more claims are processed on the insurance side and lawyers get involved with what ‘is’ is.  

 

Commercial General Liability 

As far as standard Insurance Services Office (ISO) forms read, the General Liability (GL) could pick up liability. For example, if your employee injures a sweet old lady on the sidewalk in route to a sales meeting on a scooter who pays her medical bills? From a business perspective this is not something specifically excluded on the standard special form policy so there could be coverage. 

Some tech companies are aware of the risks here and have created a company policy prohibiting the use of scooters for company business to avoid the situation. This is to protect themselves and their employees but certainly not fool proof. 

The theme here regardless of the line of commercial coverage is we have not seen a lot of claims data related to claims involving scooters. As more information is released on claims and coverage this will get ironed out. Don’t be surprised if we see the classification of a scooter more clearly defined on an insurance policy or completely excluded. 

Scooter Safety and The Rules of The Road

There were no deaths involving a scooter in Austin until recently. Unfortunately, a 21-year-old male was killed in Austin traffic while riding a Lime dockless scooter near 6th Street as reported by multiple sources. So in the spirit of prevention, here are some tips:  

• First time riders of scooters should be aware of their own skills before attempting to ride one. Check out this video of how not to take your first ride: Click here. If you have never taken a ride on a scooter, perhaps rush hour traffic downtown in flip flops without a helmet is not a good idea. 

• Wear a helmet. Bird gives a free helmet if you click on Safety in the app. You pay for shipping but it is worth the $2. 

• Don’t drink and scoot. According to Austin Police, riding a scooter while drunk can lead to a DWI. If you are drinking, there is a good chance it will be dark outside as well. Two factors that could affect the safety of your ride. 

• Scooter riders should always follow traffic signals and signs. This also means to go with the flow of traffic and not against it.  

• Bikes and scooter use on sidewalks is generally OK.  Remember to yield to people walking on the side walks or crosswalks.

You can read more tips from: What Are The Rules Of The Road For Scooters In Austin? and Austin Mobility Services. 

In Summary

Since individuals and businesses can be held liable for scooter incidents, it is in everyone’s best interest to keep Austin safe. Know the risks or riding and ride safe out there.  

About Lumen: 

Lumen Insurance Technologies is a tech-focused commercial insurance agency based in Austin, Texas. Lumen is hyper-focused on providing the technology startup ecosystem with quality commercial insurance coverage (e.g. D&O, E&O, Cyber, etc.) following a funding event and beyond. 

Check us out on the web at www.lumeninsure.com to find more blog topics, general info,  or to get help with finding coverage. Email us at info@lumeninsure.com if you would like to suggest a topic for future blogs. 

Connect with us and stay up to date with news from our client base by following us on Instagram, LinkedIn, and Twitter.