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The insurance question for gig economy participants

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Technology is changing the way we work and relate to the world, bringing great opportunities for flexible employment and extra income. We live in a world where people value personalisation in all aspects of their lives and what is termed ‘the gig economy’ presents the opportunity to do just that in terms of working life.
The gig economy is the world of work where people take on short-term contracts and freelance work as opposed to permanent jobs, sometimes used to supplement income from permanent employment.
“The age-old battle for work-life balance makes the gig economy an attractive alternative for many working people as it enables flexibility, independence and a level of control of your own working hours. Even pensioners are using their extra time to take advantage of the income opportunities it presents. The real size of the gig economy is much debated but what is clear is that it is a fast-growing space,” says Lizette Erasmus, insurance expert at IntegriSure.
Take for example, Busi who is a mother of three working as a school teacher. Because she is home by 3pm every day, she has spare time on her hands to focus on her other passion – offering homework assistance and tutoring via her app for a fee. She also offers classes from her garage on Saturdays.
“Commonly, people like Busi might not consider their ‘side job’ a business but it carries the same insurable risks as a more formalised business. If you choose to use part of your home as business premises, arrange with your short-term insurance provider to have it covered for business use,” says Erasmus.
Erasmus advises personal homeowners insurance will not provide cover for business-related assets or activity. “If, for instance, a client falls and gets injured on the premises in the process of receiving a service in your home, you could be liable for costs as your personal insurance policy will not provide cover for such claims – a business insurance policy should be in place.”
Depending on the type of work you do, which can range from offering a transport service through ridesharing apps, or a lodging service through apps such as Airbnb, to being a freelance journalist or a performing artist, you need a business insurance policy specific to your needs and risk exposure.
According to the Airbnb site, those participating in the gig economy through the app receive host protection insurance that covers hosts in liability circumstances such as third party claims of bodily injury or property damage or if a guest damages property.
Erasmus notes personal vehicle insurance does not cover vehicle rental or use for a fee and urges ridesharing partners to insure their cars against damage by taking up commercial liability insurance.
“In South Africa, we know that the common ridesharing operators such as Uber and Taxify require vehicles registered on their apps to have comprehensive commercial insurance and as well as passenger liability insurance in place,” she says.
In industries which are not as regulated, giggers, as people working in the gig economy are often called, can carry on with their gigging arrangements without realising the risks without proper cover.
“Whether you are moonlighting, freelancing or consulting on a part-time basis, it is crucial for anyone who conducts business on any scale to have the relevant insurance cover to protect them for loss of business. Giggers should not assume their personal equipment or home contents will be covered if used for business purposes,” says Erasmus.
A business insurance policy will cover you for loss or damage to equipment both on and off your premises as well as provide liability cover.
The structure of the economy will continue to shift and change as the world evolves – the United States’ Bureau of Labour Statistics estimates that by 2020, 40% of the nation’s workforce will be freelancers, temps, independent contractors or entrepreneurs. Insurance companies have a responsibility to adapt and then educate consumers on the impact of these changes on their insurance policies.