Join our webinar

How embedded insurance is changing the face of regulation & compliance

Thursday 25 May
1:00 PM CEST
Register now

Related solutions

Blog post

Gig economy: intimately connected with insurance

As more and more workers flock towards the gig economy, from food delivery riders to freelance consultants, employers need to think about how they can meet their evolving needs – which means getting intimate with insurance.
Delivery & gig economy
Words by
Time to read
5 minutes
Last updated
March 16, 2020
In a nutshell
  • Insurance is inevitable in the gig economy.
  • The challenge is aligning business risk with insurance cost.
  • Coverage for the gig economy – where to start?

The platform economy is the new normal

The rise of the gig economy is one of the most dramatic shifts in the labour market in recent years. People participate in it not just to earn a living, but to better organise their lives.

Three out of four American gig workers say being an independent worker provides them with the flexibility they need to manage both their work and home life – a finding that is also supported by the UK's largest ever rider survey conducted by Deliveroo.

Self-employed workers worldwide are substantially more satisfied than traditional employees. The most important drivers of this are the increased autonomy that independent workers enjoy and the fact that they tend to find their work more interesting.

They see work as a means to fulfil a deeper need, and will pick and choose the platform or client that best meets their needs, for example, by comparing insurance coverage.

Of course, there are (growing) stressors in this line of work. Gig workers feel a host of personal, social and economic anxieties without the support of a traditional employer.

But studies show that they not only prefer this independence, but that they're unlikely to give up the benefits that come along with it. Another survey by Deliveroo found that three-quarters of riders were unwilling to trade greater security if it meant less flexibility.

two drivers use a GPS app to navigate through traffic
Any gig platform that is serious about acquiring talent should have compelling insurance benefits.

Increased competition means benefits like insurance are inevitable

In today’s tight labor market, any platform that is serious about scaling its talent management needs to build compelling benefits. The impact goes much further than reputation and talent management.

Uber has faced countless headline-generating battles in its quest to make ridesharing widely available.

Insurance is an obvious part of the transportation industry; it’s required to drive a vehicle in almost every market in the world. In its IPO filing Uber noted, 'Our business depends heavily on insurance coverage for drivers and on other types of insurance for additional risks related to our business.'

Insurance is the largest variable cost for Lyft. Tackling and dealing with insurance costs has a massive impact on the company’s business model. It’s safe to say that sooner or later every platform will be confronted with the issue of insurance.

Uber spent countless hours meeting with insurers to explain the risk of ridesharing to underwriters. Luckily, the insurance world has seen the light and has started to understand the opportunity presented by gig economy platforms.

Unfortunately, their products and company structures associated with traditional insurers are still very hard to match with a global gig platform – hence the rise of specialised insurtechs.

a pizza delivery driver rides his motorbike through a European city
Freelance gig workers, who are particularly vulnerable, need specific types of coverage.

Insurance coverage for gig workers – where to start?

What is gig insurance?

Insurance for delivery and gig workers is a unique type of coverage. These workers are not sitting behind computers all day – they’re out on the road, often delivering items by bike or moped.

This means that they’re exposed to much more risk during a day’s work, and should therefore be covered in case they’re involved in an accident and injure someone else or injure themselves and are unable to work.

The situation is further complicated by the fact that in many places these workers are considered freelancers, which means that they don't benefit from national coverage or standardised benefits that a traditional employer might provide. This results in a gap in coverage that fails to recognise the vulnerabilities these couriers face on a daily basis.

This is where platforms can step in to provide quality benefits such as:

Personal accident coverage

Gig workers are especially vulnerable and can be exposed to dangerous situations. A courier who delivers parcels on a bike might be involved in an accident, for example. For this type of work, it's crucial to cover medical expenses, dental benefits or worst case, even a fixed indemnity.

Also bear in mind that a platform worker's family might be severely impacted by this. In case of hospitalisation, they might be faced with extra costs for childcare or transportation. Coverage with special family benefits can help them tackle these expenses.

Temporary incapacity coverage

If, after an accident, a gig worker is unable to work for a couple of weeks or even months, he or she will soon find themselves in a difficult financial situation.

Temporary incapacity benefits protect their income if they can’t work anymore. This is usually in the form of a daily allowance for a specific period of time.

Insurers are not keen on covering the extra risk, but ask them to cover temporary incapacity in case of sickness as well. After all, if a gig worker is sick and can’t go to work, they'll face the same financial issues as after an accident.

General liability insurance

Highly skilled freelancers face other issues. They're not covered by the public or product liability of the ordering customer. They would need to purchase rider liability insurance themselves to cover any damages they could cause to a third-party while on the job.

Many freelancers who only work a couple of hours per month will never get such coverage because it's too expensive – but they're exposed to a real risk.

Discover more insurance solutions for the gig economy →

What gig platforms should consider in a potential insurance partner


Gig economy players tend to underestimate the complexity of launching a global or even pan-European insurance solution. There might be one global account manager, but the day-to-day operations will be managed locally in each individual country.

So how will the insurer handle these geographical challenges? How are they represented in each market? Unnecessary layers of complexity can increase operational costs.

The only way to enable a standard process, uniform coverage and quality of service is to work with a partner that has centralised operations..

Access to data

Insurers rely on statistics to measure the risk they cover. Try to gain insight into how their premiums are calculated, as it gives you room for negotiation. Are they able to connect to your logs? Maybe you've implemented measures to improve safety?

Insurance is all about statistics and prevention. The more data you connect, the more you'll be able to optimise insurance costs in the midterm. Build your case, and make sure the insurer has all the information and fully understands the risk you would like to cover.

Digital capabilities

Your couriers are most likely digital natives or feel very comfortable online. If you communicate through digital channels, is the insurer able to handle chat, email or even WhatsApp communication?

Would you prefer an online claims process?

It’s probably the biggest moment of truth in insurance, so take your time to dive into the specifics. Are they able to accommodate this and interface with your platform?

Customer satisfaction

Is the insurer tracking customer satisfaction? Are they comfortable sharing those results and doing regular reporting? After all, if you offer insurance and the experience is lousy, it will rub off on you.

This is where standardised service level agreements and a centralised operations structure shows its strength. The ability to help workers in their own language is also critical.

Insurance is a necessity for platform workers

Ultimately, insurance is an integral part of the gig economy.

If you can provide basic coverage for your couriers, it would remove a major hurdle for aspiring gig workers and further coverage would help give you a competitive edge over other platforms.

Read more: why embedded insurance is the solution to growing calls for gig workers rights →

In the case of our partner Deliveroo, they've been able to harness the power of embedded insurance to attract new talent.

To learn more, talk to our team of experts, who has years of experience helping gig economy players like Deliveroo, Glovo, Wolt and more.