Share this e-Alert:

Polsinelli - Insurance Recovery Polsinelli - Insurance Recovery


March 2015


Uber-Complicated: Insurance Challenges for Transportation Network Companies







For more information about this alert , please contact:


Richard C. Giller



Email | Bio


Insurance Recovery Leadership:


Troy B. Froderman

Practice Area Chair


Email | Bio


Lauren Tucker McCubbin

Practice Area Vice Chair


Email | Bio



To view a full list of our Insurance Recovery professionals, click here.


For current Intelligence or to learn more about our Insurance Recovery practice, click here.


View Polsinelli documents on JD Supra  
LinkedIn Twitter Facebook Inside Law Podcast Connect with us on LinkedIn. Connection with us on Twitter. Connect with us on Facebook. Connect with us on LinkedIn. Connection with us on Twitter. Connect with us on Facebook.



Transportation Network Companies (TNCs) facilitate the use of personal vehicles to transport passengers for a fee using a technology based platform, such as a website or a mobile application to connect riders and drivers. The three most widely used TNCs are UberX (available in 53 countries and more than 200 cities worldwide), Lyft (available in 60 locations in the United States) and Sidecar (available in a number of California cities and elsewhere). TNCs are growing in this country and, as with many new businesses, there are also new and unforeseen risks. Among those are a number of unresolved insurance issues relating to covering the use of a personal vehicle while engaged in a commercial endeavor. As a result, if you are a TNC or you are thinking about establishing one, you should consult with an attorney to determine whether the current insurance policies and coverage satisfy state and local requirements in your area, and to analyze whether any new insurance products may provide further security.

Most personal automobile policies exclude transporting strangers for a fee through a "livery exclusion" in standard policies. Regulation of TNCs is in its infancy and, not surprisingly, the state leading the way is California. In fact, it was the California Public Utilities Commission that coined the term "Transportation Network Company" to describe these rideshare entities. TNCs are quickly replacing taxis and limousines as a means of hiring transportation, but, whereas taxis and limousines are licensed by the state and are required to have commercial insurance protecting both passengers and third parties 24 hours a day, 7 days a week, no such licensing or insurance requirements currently exist for TNCs, so coverage gaps may well exist.

TNC services are broken down into three primary periods:

  • Period 1 is the time where a driver had the App open and he/she is waiting for a match;

  • Period 2 is the time when a match has been accepted, but the passenger has not yet been picked up and the driver is on his/her way;

  • Period 3 starts when the passenger enters the vehicle and lasts until the passenger exits the vehicle.

Pursuant to legislation passed last year in California, effective beginning July 1, 2015, different levels and different types of coverage attach to each of these periods. For example, during the first two periods, the TNC must maintain primary insurance in the amount of $50,000 per person, $100,000 per incident, and $30,000 for property damage. In addition, the TNC must maintain at least $200,000 of excess coverage per occurrence during these periods. During the critical third period, California will require primary commercial insurance in the amount of $1 million, as well as an additional $1 million of uninsured and underinsured motorist coverage.

Most Uber riders are probably not aware that Uber is not the name of the rideshare company instead, Uber Technologies Inc. is the entity that licenses the software/application and the ride share is a separate entity known as Rasier LLC (Rasier-CA LLC in California and Rasier-DC, LLC in the District of Columbia). The Rasier entities, and not Uber, are listed as the named insureds on a standard Business Automobile Insurance Policy issued by James River Insurance Company, a specialty insurer operating on a non-admitted basis in all fifty states and the District of Columbia.

For More Information

The minimum insurance protection required by state and local agencies for TNCs is constantly evolving and varies by location. For assistance in these evaluations, contact your Polsinelli attorney or a member of the firm's Insurance Recovery practice.











Atlanta  Chattanooga  Chicago  Dallas  Denver  Edwardsville  Jefferson City  Kansas City  Los Angeles  New York
Overland Park  Phoenix  Raleigh  St. Joseph  St. Louis  San Francisco  Springfield  Topeka  Washington, D.C.  Wilmington








real challenges. real answers.SM  
Polsinelli is a first generation Am Law 100 firm serving corporations, institutions, entrepreneurs and individuals nationally. Our attorneys successfully build enduring client relationships by providing practical legal counsel infused with business insight, and with a passion for assisting General Counsel and CEOs in achieving their objectives. Polsinelli is ranked 18th in number of U.S. partners* and has more than 740 attorneys in 20 offices. Profiled by The American Lawyer and ranked as the fastest growing U.S. law firm over a six-year period**, the firm focuses on health care, financial services, real estate, life sciences and technology, energy and business litigation, and has depth of experience in 100 service areas and 70 industries. The firm can be found online at Polsinelli PC. In California, Polsinelli LLP.

* Law360, March 2014
** The American Lawyer 2013 and 2014 reports







Polsinelli provides this material for informational purposes only. The material provided herein is general and is not intended to be legal advice. The choice of a lawyer is an important decision and should not be based solely upon advertisements.

Copyright © 2015 Polsinelli PC.

Connect with us on LinkedIn. Connection with us on Twitter. Connect with us on Facebook. Polsinelli Insurance Recovery Insurance Recovery