Increasingly, home care agencies are turning to Uber and Lyft to transport clients. What are the insurance coverage implications of doing so?
Many insurance policies for home care agencies include a coverage line ‘Hired Auto’. Do Uber/Lyft services trigger hired auto coverage? Let’s look at a typical insuring agreement:
A. Hired Auto Liability: The insurance provided under the Bodily Injury & Property Damage Liability coverage applies to “bodily injury” or “property damage” arising out of the maintenance or use of a “hired auto” by you or your “employees” in the course of your business.
With the definitions of “hired auto” as follows:
“Hired auto” means any “auto” you lease, hire, rent or borrow. This does not include any “auto” you lease, hire, rent or borrow from any of your “employees”, your partners or your “executive officers”, or members of their households.
To meet the definition of a ‘Hired Auto’, the vehicle in question must be leased, rented, hired or borrowed by you (the named insured) or your employees and used in the course of your business. That tells us that who arranges for the Uber/Lyft service is critical to coverage:
If your employee arranges the Uber/Lyft, and your agency pays for it, we believe that coverage under most ‘Hired Auto’ sections will be triggered.
If your client arranges and pays for the Uber/Lyft, we believe that coverage WILL NOT be triggered.
Note that there has not yet been a coverage challenge in court on this issue. Inevitably there will be, and at that time we will know for sure. This is our best guess at this point.