The on-demand service industry is ever-growing and soon the leading companies will ask how commercial insurance can help to limit work-related issues. 

Technology is the Tip of the Problems

On-demand service providers can no longer argue that they’re innocent bystanders who just provide a technological platform that connects users with different services offered on the app. It’s just an unrealistic premise to think an on-demand service company would not be a liable party in an independent contractor lawsuit. Sharp on-demand service companies will have a commercial insurance policy that protects them from unscrupulous business practices from independent contractors that advertise on their website. The wording of these type of policies isn’t of the standard nature as the coverage agreement is quite extensive because of the wide range of services provided by each independent contractor. 

The 1099 Economy

The on-demand business community is often called "the 1099 economy" as this is a reference to the Internal Revenue Service (IRS) tax form that most workers of this industry will fill out each year. Their define as independent contractors who provide a specific service on short or long-term projects. Often, on-demand businesses will create a separate commercial policy that covers independent contractors on their payroll. But, this practice has been legally challenged as most insurance providers will require proof of coverage before independent contractors are allowed to work in any capacity for the policyholder. This stance has been softened somewhat if the company adds independent contractors as employees to their policy. 

The Risk of Insuring On-Demand Services

One of the biggest nuances in the commercial insurance industry is determining the coverage capacity for the on-demand service industry. It may come down to the distinction between independent contractors and employees. Because this definition has yet to be defined by those who run these businesses. Agents like Cross Creek Insurance in Hope Hills, NC will draft a policy that covers both groups together as one entity. Some businesses may want general liability added to their coverage, so to protect themselves from the actions of the insured.