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E-scooters open up new challenges in liability and insurance

In the last two years, electric scooters have taken the country by storm. Users have responded to this easily accessible, environmentally friendly form of transportation in droves. However, as the popularity of e-scooters has grown, so have the rates of injuries.

As New York moves closer to legalizing electric scooters, regulators and insurance providers alike are examining issues of liability. Most scooter companies disclaim all liability in their user agreements, but the personal insurance policies held by users may not cover their injuries. What policies will emerge to close the gap?

With numerous possible causes of injury, inconsistent coverage and differing municipal laws, this area will surely see a lot of development over the next several years.

E-scooters present multiple avenues of liability

Riders of electric scooters sustain injuries stemming from numerous factors, especially when they are inexperienced riders. Potential causes of injury include:

  • Vehicle issues, such as low battery life or breakdowns
  • Poor road quality
  • Failure to ride in designated lanes
  • Inconsistent maintenance

The last point presents an interesting question: How will insurance companies address work done by third party mechanics, who often learn scooter repair from unregulated sources like YouTube? An operator’s general liability policy may cover injuries caused by faulty repairs, but individual mechanics may be subject to liability as well.

How the insurance industry has responded to electric scooters

For insurance companies, the biggest challenge appears to be determining what coverage will meet the different requirements passed by municipalities that have legalized e-scooters. A few insurers have begun to offer general liability coverage to meet these requirements. But, many seem to be waiting to see the outcome of challenges to user operator agreements that attempt to hold scooter companies harmless.

As with any new technology, new safety measures and insurance approaches are sure to follow expanded popularity. Providers will need to look closely at municipal requirements as well as the key sources of liability in order to respond efficiently.

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