Sharing is Caring? Russell Scanlan Discusses Underinsurance in the Sharing Economy
From cars to office space, the UK’s services and products are increasingly being shared out for rental as part of the booming ‘sharing economy’. This direct hire, mostly over the internet, can leave suppliers wide open to underinsurance. It is now essential for insurers to recognise that the sharing of personal belongings and services is spilling over into SME and larger business markets, and requires very specific and tailored cover.
Starting with the likes of Uber and Air BnB, the sharing economy is a concept that is increasingly favoured by budding entrepreneurs from across the globe. Technology has reduced transaction costs, making sharing goods and services easier and cheaper than ever – and on a much larger scale. Companies based on this notion are growing rapidly, with innovative UK companies such as ParkAtMyHouse (clue is in the title) and StreetBank – a community lending app, taking the lead.
With the flexible and pioneering nature of the sharing economy also comes the requirement for flexible and pioneering new types of insurance. Larger companies are taking note; Zurich established its ‘sharing economy working group’ in 2015 and Allianz has also set up a new unit dedicated to alternative economic channels. However, smaller insurers need to take action to ensure they don’t lose potential new business.
Entrepreneurs are looking for the next big thing and will need flexible insurance to go with it – whether that’s specialist guest liability cover for a house renting business, or intellectual property insurance for an app company. Insurers and brokers will need to be equipped with the capability to cater for niche business sectors as this collaborative economy grows.
As an independent broker, we’re able to be nimble and our service offering is flexible, in order to deal with the growing demand for non-traditional cover from new and existing SMEs. If you need any advice about your business insurance, don’t hesitate to get in touch with one of our expert team.