Changing workplaces and the rise of the sole trader and gig economy has introduced new opportunities for specialist scheme providers
For workers in the ‘gig economy’, where there is no concept of set working hours, pay-as-you-go insurance products are an apt scheme solution.
According to PwC, the gig economy is made up of five broad sectors comprising crowdfunding, asset sharing, transport, on-demand household services and on-demand professional services. In the UK, it is estimated that nearly three million people worked in the gig economy during the past 12 months, with courier services one of the most common type of activities.
Insurtech firm Zego is one startup that is targeting its flexible, app-led products to companies in the gig, or sharing economy. Zego was founded by former employees of Deliveroo, who realised that gig economy workers should legally be covered by commercial insurance but that traditional policies did not work. Its pay-as-you-go coverage operates only when needed and is activated through a mobile app, equipped with a virtual assistant.
Meanwhile, specialist insurance provider Pikl (formerly Inlet) specialises in insurance for the sharing economy, including for Airbnb and JustPark. Its research shows that nearly half of property owners who regularly rent or swap their homes cite property damage as a key concern.
The start-up aims to plug the gaps in conventional home insurance policies by providing cover for the period of time that Airbnb properties are occupied by short-term guests.
Tailoring schemes to the gig economy offers opportunities for scheme brokers, according to Marsh president of global risk and digital John Drzik.
In November last year, the broker launched Bluestream, a cloud-based digital broker platform for the affinity market.
“While the platform can serve our clients in all industries, it’s particularly relevant for global clients in digitally advanced sectors as well as digital native organisations like sharing economy companies,” said Drzik.
New products target sole traders as more UK workers go it alone
Since the recession, which reached its peak in 2008, the number of self-employed people has risen steadily and now stands at 4.8 million, according to the Federation of Small Businesses.
Among the new products that have been brought to market over the past 12-24 months are schemes aimed at sole traders and micro-SMEs, including tradesmen, microbreweries and complementary therapists.
Lloyd’s coverholder Instant Underwriting has developed a wholesale liability scheme for tradesmen, premises-based businesses and landowners in partnership with SchemeServe. The cover, which combines public and product liability as standard, includes optional extensions for employers’ liability and tools cover.
As the popularity of craft and artisan businesses grows, with self-employed workers selling their products via online platforms such as Ebay and Etsy, several schemes tailored to artists, crafters and microbreweries have also been developed.
And with estimates that around nine million people in the UK use complementary and alternative medicine (CAM), including reflexology, acupuncture and body massage, schemes targeting practitioners are also becoming more prevalent.
“We’re finding that many therapists have taken cover for public liability but are not necessarily covering the products used/supplied, or indeed the medical malpractice risk if a treatment goes wrong,” says Tom Head, team leader personal lines at Alan Boswell Group.
“Some fail to understand the covers required, such as errors and omissions in advice given, and libel and slander for false allegations, etc. Meanwhile, many opt for a much lower level of cover than they need.”
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