Avoiding more traditional options for easier, more cost-effective choices in the new sharing economy is a no-brainer. It’s simple and everyone’s doing it. Why would you hail a taxi when you can call an Uber or a LYFT on your phone? However, it suddenly becomes a lot less simple when things go wrong. Who’s liable to pay your medical bills in an accident with Uber, and who’s responsible if someone dies at an Airbnb?
Because these services like Uber and Airbnb are so new, legal regulations are still catching up. At first, there weren’t any clear answers to these questions because it was merely uncharted territory, legally speaking. There still aren’t as clear regulations on these businesses as there are no taxis and hotels, but the picture is getting clearer as new cases occur and force us to figure these things out.
For car accidents involving Uber, everything depends on whose fault the accident was, and what the Uber driver was doing when the accident happened. Uber provides insurance coverage whenever the Uber driver has a passenger in the car, or if the driver was already matched with a passenger or actively awaiting a passenger match. They provide liability, personal injury coverage, and uninsured/underinsured driver insurance. So if you were a passenger in an Uber during an accident, Uber should be on the hook for covering your damages. According to Edward Friedman, co-founder and partner at Friedman Simon, a personal injury firm in New York, “Nevertheless, Uber accident claims can also be extra challenging to resolve, just for the added complexity of working with Uber and debating liability.”
As far as incidents with rideshares like Uber that aren’t explicitly driving-related, legal liability has yet to be seriously tested. However, Uber has stated that, because their drivers are independent contractors and not employees of Uber, that Uber is not legally responsible for their behavior. That would mean that if a driver assaults or harasses a passenger, only the driver can be held accountable, and Uber will not be on the hook for any consequences.
Liability with Airbnb
Airbnb, just like Uber, has repeatedly claimed not to be liable for conditions in their hosts’ homes or for any incidents or damages that occur involving guests. Over time, however, as more and more notable incidents have made their way to the news and legal claims have worked their way through courts, there has been some change. Incident claims still generally have a better shot going directly to the host and their home, but Airbnb now provides a level of insurance to all of their hosts. They include liability coverage for property damage or personal injury for every stay in an Airbnb property, although there may be some limitations in what they’re willing to cover.
Airbnb hosts who sustain damage to their home or whose guests get hurt in their home may still be at risk of financial liability for some costs, so it’s important to be careful and intentional in studying the insurance being offered. This is especially important because most Airbnb hosts don’t have any insurance otherwise. While many Airbnb hosts have homeowner’s or renter’s insurance, those policies generally don’t cover anything related to short-term guests. That’s because most homeowner’s insurance policies apply only to long-term residents and exclude business-related incidents.