Breaking the law could void motor vehicle insurance cover
In New Zealand anybody who carries passengers for profit or reward is required to have a 'P' endorsement on their driver's license, which permits them to carry passengers – you can find out more about 'P' endorsements here.
A potential problem arises when the 'sharing economy' platform you're working with doesn't require you to have a 'P' endorsement on your license to participate. However, transporting passengers without one is breaking the law and could nullify your insurance policy.
"Most insurers would consider the claim on a case by case basis," said AMP's Head of General Insurance, Rob Dibley. "But generally speaking, yes you may be at risk of voiding your insurance if you break the law."
Is your vehicle insured for commercial use?
"Most New Zealanders will have some form of insurance on their vehicles, even if it's just third party insurance. More often than not, it's going to be for personal use only and in almost all cases exclude cover when you are carrying fare paying passengers."
"If an insurer agrees to cover your part-time transport business, they may endorse your existing policy or they may want you to take out an entirely new contract such as commercial motor vehicle insurance," Mr Dibley said.
Another factor to bear in mind is that even as a 'part-time' taxi driver, you will be carrying baggage and the like.
"A carrier's liability cover should be included as they will be subject to the Carriage of Goods Act 1979."
Public liability insurance for part-time taxi drivers
Another consideration is that you might have a reason to enter a third party site. For example, a building or somebody's home, to collect passengers.
|"If an incident occurs while you are not in your vehicle, you could be held accountable for that damage. Again, consulting with an insurance professional is important. Public liability/statutory liability should be considered as a minimal cover."Rob Dibley|
Public liability might not seem important to a part-time taxi driver, but recent amendments to the Sentencing Act may change your mind.
Recent law changes mean that your passengers can take out a civil case against you. This will be for losses in excess of the ACC compensation cap of 80% of a claimant’s salary," Mr Dibley said.
What about insurance policies provided by sharing platforms?
Independent insurance advice is always going to be in your best interests. Some sharing platforms offer a form of cover or guarantee to users, but bear in mind that they may be there to protect the interests of the entity, with minimal benefit to the owner of the property/vehicle. Some also warn that the guarantees are not there to replace your existing insurances.
"Often policies provided by the sharing platform don't provide much, if any, protection to property or the vehicle. Customers should always disclose what they're doing to their insurer because you will find that most insurers are prepared to insure under differing terms and conditions," Mr Dibley said.
If you are participating in the sharing economy and would like some independent advice, talk to your Adviser. He or she would be happy to help.
Get tailored insurance for your business
Contact your Adviser or make an enquiry now.