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Does Uber Have Adequate Insurance Coverage in the Event of a Car or Pedestrian Accident?

Uber is an app-based transportation network and ride-sharing company that many of us have heard about or even used. Uber, based in California, launched in June 2010 and provides consumers an app to request and reserve rides. As of December 2014, Uber is available in 53 countries and more than 200 cities worldwide, including Ottawa, Montreal and Toronto.

Many taxi drivers, companies and governments in various cities, including Toronto, have objected to Uber because they believe that it is an illegal taxicab operation which engages in unfair business practices and compromises passenger safety.

Uber has been operating in Toronto since 2012, initially offering taxi and limo services. However, it later launched UberX, which allows ordinary drivers to use their personal vehicles to pick up fares.

Currently, the City of Toronto is pursuing legal action against Uber to stop its operations in Toronto. The City alleges that the company operates illegally. UberX operates outside Toronto’s taxi regulations, and the City of Toronto has insisted that Uber must abide by them and get a brokerage licence.

The City is conducting an extensive investigation to prepare its case. The investigation so far has concluded that there are safety problems with Uber, including issues with auto insurance coverage, driver screening and vehicle inspections.

Insurance Coverage

Probably one of the biggest concerns is inadequate insurance coverage. The City is worried about the safety of passengers, pedestrians and other motorists if a car driven by an UberX driver causes an accident.

Toronto taxis are required to have commercial insurance, a more comprehensive and costly form of coverage than personal auto insurance coverage. Further, they must carry a minimum of $2 million in liability insurance. It is unclear whether UberX drivers are required to have commercial insurance.

According to Uber, every UberX driver is covered by a $5 million contingent auto liability insurance policy covering bodily injury and property damage, in addition to any insurance coverage maintained by the driver. In other words, if an UberX driver causes an accident and the passenger is injured in the car accident, the driver’s personal auto liability coverage would kick in first. If that coverage is not enough to compensate the passenger for his injuries or damages, then Uber’s contingent auto liability coverage would kick in.

However, can an UberX driver’s personal auto insurance policy deny coverage since the driver was engaging in a business activity and not operating the car for personal reasons? What happens if the UberX driver is on his way to pick up a fare and gets in a car accident and hits pedestrians? Does Uber’s contingent auto liability insurance coverage apply in that situation? These are all valid, legitimate concerns for the safety of motorists on the roads.

An injunction hearing is scheduled for May, and we will have to wait to see what happens.

About Bergeron Clifford

Bergeron Clifford LLP has proudly and successfully represented injured clients and their loved ones in all types of motor vehicle accidents (distracted driving accidents, drunk driving accidents, etc.), across Kingston, Ottawa, Whitby, Perth, and Eastern Ontario. Their goal is to help you receive appropriate compensation in the shortest amount of time. 866-384-5886

*Source: www.thestar.com (Toronto officials want Uber taxi app out of the city)

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