Biba publishes sharing economy guide

Biba and DAC Beachcroft have published an insurance guide for the sharing economy to help businesses and individuals find insurance.

The trade body said it was difficult for sharing companies to obtain insurance for themselves or their customers because they often did not own the items being shared, such as vehicles, tools or rental properties. 

Aon, Bluefin and Towergate are among the brokers that have been listed as offering cover within the sharing economy. Other firms include Tysers, AJ Insurance Services, Higos, SJL Insurance Services, Sky Insurance and CSIS.

Biba said insurance brokers were in the best position to find new solutions to cover the risks.

The guide looks at the potential confusion around car sharing. For example, a motorist would need to add business use to their policy if they shared a commute with a colleague who is collected from a different location. Or they might need special ‘hire and reward’ cover if they make a profit on a shared journey. 

It also looks at whether a property owner would need a specialist short-term landlord policy if they are renting out a room in their home.

Biba said the guide would provide clarification on insurance issues to ensure that adequate protection was in place and reduce the risk of businesses and individuals invalidating policies or being inadvertently uninsured.  

Biba executive director Graeme Trudgill said: “To use the item, but not to own it in many cases, presents unique challenges to the traditional insurance industry.

“Biba members have been approaching insurance markets and can use their expertise in risk management to work with sharing economy businesses to find ways to reduce the risk.”

In the UK the sharing economy is estimated to be worth £500million, and is growing at 25% per year.

The guide follows the launch of a government review into the sharing economy and meetings between Biba, ABI, insurance representatives, 10 Downing Street and sharing economy companies to find ways to overcome potential insurance issues that could prevent growth in the sector.

Minister for business, enterprise and energy Matthew Hancock said: “There is huge economic potential for the sharing economy and I want to make sure that the UK is a world leader.

“An estimated 25 per cent of UK adults are already sharing online and getting a slice of £9 billion in global revenues – we are backing these everyday entrepreneurs and it’s great to see the insurance industry responding quickly and developing new products to support them too.”