That rental e-scooters are now classed as motor vehicles in the UK represents a significant opportunity for insurers. Commuters are likely to avoid wanting to take public transport while the COVID-19 pandemic is still around, so this should be a key growth area in the immediate future.

Findings from GlobalData’s report, Thematic Research: Sharing Economy in Insurance, highlight that, under the current business model, riders using e-scooter rental platforms are liable for any damage or harm caused by their use of the vehicle. Should a rider have had an accident that caused injury to a pedestrian or property, then challenges regarding insurance coverage arise. In the US, popular e-scooter platforms Bird and Lime offer limited liability insurance, but when accidents occur, it poses challenges of liability.

GlobalData analyst, Ben Carey-Evans, commented: “It is likely that start up insurers that have succeeded in the gig economy will look to transfer their ability to provide quick, digital and flexible cover to this space. These players are generally quick to spot new markets and launch products, so established insurers will need to be proactive, and offer modern policies if they are to benefit from this opportunity.”

Back in May 2020, when the UK Government announced that it was fast-tracking e-scooters trials, the British Insurance Brokers’ Association raised the concern that the Road Traffic Act 1988 needed to be changed in order to suitably interpret legal cases that could arise from e-scooter accidents. Since then, however, the government has not made the necessary regulatory changes, making it difficult for rental operators to implement adequate insurance coverage that will identify liability should an accident occur.

Jazmin Chong, Insurance Analyst at GlobalData, commented: “The UK Government has not introduced the necessary regulatory changes to suitably interpret legal cases that could arise from e-scooter accidents. Cases such as in June 2019, where a cyclist was ordered to pay around £100,000 in compensation and costs when they knocked over a woman who was looking at her mobile phone while crossing a road, have set an alarming precedent that could be replicated in the legalization of e-scooters. Home or car insurance could provide cover for damage caused by a third party, including shared mobility users. Around the globe, regulation has not been able to keep up with the rapid growth of the e-scooter market.”