Public Service Announcement! Companies have no legal responsibility to provide insurance for independent contractors!!
Imagine earning some extra cash as an Uber driver for New Year’s Eve. Things are great at $25 an hour, but you get into an argument with a rider and he reacts with physical force. Two damaged teeth and one expensive surgery later, you are stuck with medical bills and unable to work, only to find Uber has no legal obligation to provide you compensation.
As an independent contractor with Uber, able to set your own hours and riders, you are on your own when hurt while on the job. In an interesting comparison, most American taxi drivers are also independent contractors, but still receive Workers’ Compensation in most states, including Colorado, because of the high risk of the job.
This is the danger of the “Sharing Economy.” Also known as the gig-economy or freelance economy, companies in this field often do not disclose a lack of Workers Compensation Insurance. This is a huge deal when many employees in this type of business have never been a part of a sharing economy before, and do not realize that their take-home pay has to cover the things that traditional employers would take care of, which includes insurance protection.
Part of the problem is Worker’s Compensation, as an insurance plan, does not make sense for this type of job. How can the insurance cover lost wages when you set your own hours, obtain income from several different sharing economy based companies, or have unclear on-site hours like AirBnB hosts?
As an insurance agency, writing Worker’s Compensation daily, we cannot help but wonder what kind of protections we can provide an independent contractor. We suggest obtaining a quality personal auto insurance policy. If your policy options exclude business use, look into getting a commercial driver’s license for commercial auto insurance instead. Potentially, we can find new polices tailored to the sharing economy with partners like MetLife. Call use today and we can discuss the details with you!
Source: Forbes’ Sharing Economy and Worker’s Compensation Article