As more people embrace the ‘gig economy’ many are forgetting to check on the insurance implications.


Financially exposed: Gig workers and the insurance conundrum


From ride-share services to food delivery, ‘tasking’ to freelancing, more Australians are embracing the ‘gig economy’. But many are failing to make sure they are properly insured.


In 2019, 7.1% of working Australians found jobs through the ‘gig economy’, signing up to more than 100 digital platforms to make a living, according to research commissioned by the Victorian Department of Premier and Cabinet. Airtasker (34.8%), Uber (22.7%), Freelancer (11.8%), Uber Eats (10.8%) and Deliveroo (8.2%) were the five most common platforms used by Australian workers, who earned an average of $32.16 per hour (before operating costs).


‘Gig workers’ enter into formal agreements with on-demand companies to provide services to the company’s customers. However, they are not employees – they are freelance, self-employed independent contractors who use their own assets, such as vehicles or computers, to do their work. In the main, they are responsible for their own insurance.


Gig workers who are not covered by an employer’s insurances, may be exposed to greater risks than traditional employees and may not even be fully aware of all the risks they face. Although most platforms offer some level of insurance, the insurance cover may be in place to protect the end-user/customer but not necessarily cover the worker for any injury or loss.


Regardless of the work being undertaken, gig workers are likely to need Liability Insurance in case they cause injury or damage while working. Depending on the nature of the work, other insurances may be needed such as Professional Indemnity, Business Insurance, commercial vehicle or portable equipment covers. As gig workers are not employees, they are not generally covered by workers’ compensation and should consider things like income protection, accident, death and disability insurance.


Although many gig workers will rely on personal insurances (such as private motor vehicle), these covers are unlikely to provide protection if a claim arises from the policyholder’s gig work (for example, if they have an accident while transporting a paying passenger). Most policies exclude commercial activity.


When arranging insurance, gig workers need to make full disclosures to their insurer, or they could find their policy void. A recent case before the Australian Financial Complaints Authority (AFCA) highlights this requirement. An Uber driver had his motor vehicle accident claim knocked back because he had failed to tell his insurer that he was working for the ride-share company. He had started working for Uber shortly after he purchased the policy. The insurer argued that if he had advised them of the change of use, they would have cancelled the policy and not taken on the risk. As such, they declined the claim. The driver argued he was not on an Uber job at the time of the collision and did not know he had to inform the insurer about any change of use. AFCA found in the insurer’s favour and agreed they were entitled to decline the claim.  

Given the exclusions and obligations set out in commercial and personal insurance covers, it is important for gig workers to understand not only what types of insurance they require but also select a policy that will provide the coverage and protection they need.


As the gig economy gains in popularity, insurance providers are responding with tailored products. Talk to your EBM Account Manager about insurance options and let us know if you are a gig worker and need to advise your insurer about a change of use.



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