You are bound to have heard of, if not seen, the increasing trend of electric scooters being deployed into downtown areas of larger cities. This technology, which experts are calling “micro-mobility”, has the potential to reshape the thought of transportation in cities.
Bird, a scooter-sharing startup with a capital valuation of $2 billion, has been under scrutiny since they began. Lime, a similar company, recently launched in Omaha and has faced its own level of unease with those driving and walking alongside this new technology.
With the new addition of these electric scooters, come potential threats that aren’t fully understood. A recent article was published by the Washington Post linking the use of these scooters to a rise in emergency room visits—some were surprised while others expected the results.
But what are the potential implications for 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 victim’s 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, PAPs would provide liability coverage for vehicles 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.
Homeowner’s 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 serve 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.
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.
Wise words from Mr. Wilson! And while insurance companies are still figuring out how to respond to these new changes, it’s always a good idea to keep asking the hard questions.
The big takeaway here is, when you jump on these scooters, you are more than likely assuming all of the liability risk. If you run into someone and hurt them, you are likely paying the bill yourself.