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Insurance for On-Demand & Shared Economy

The on-demand and shared economy is in a period of rapid growth. Projections show the global market reaching over $335 billion by 2025, driven by the demand for innovative digital platforms, seamless peer-to-peer services, and data-driven marketplaces.

While this growth presents exciting opportunities for companies in the on-demand and shared economy, it also comes with a unique set of risks. You need to consider things like gig worker misclassification, commercial auto and general liability, and professional liability.

Founder Shield offers specialized insurance for on-demand and shared economy companies. We provide the comprehensive protection you need to innovate and scale with confidence.

On-Demand Industry Overview

On-demand economy is a simple concept based on the idea of supplying consumers with a product or service they’re familiar with, but providing it faster and more intuitively than the industry ever has. Driven in part by the ease of use provided by app-based platforms.

On-demand companies are often grouped with shared economy companies, and in most cases the terms are synonymous. The shared economy refers to companies who offer products that are shared among users/members. AirBnB, Getaround and Jump Bikes are all examples of this, but so are Uber, Lyft and SideCar.

All of this leads to an industry that is projecting exponential growth. By some estimates, shared economy companies could be generating revenues of $335 billion globally as soon as 2025. Emerging markets are more accessible to on-demand companies and many of these markets are ready and willing to join the fun.

Often the backbone of any on-demand company is data, and with that comes some inherent risks. Any services provided through digital platforms have the ability to fail. That means a third party like a customer can suffer a loss, financial or otherwise. Additionally, unique risks are posed depending on the service offered that can range from customer injury to theft.

Why is Insurance for On-Demand Companies Important?

On-Demand companies can use insurance to protect themselves from various risks, streamline their operations, and build credibility within the industry.

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Mitigating Gig Worker-Related Risks

The on-demand model relies heavily on a flexible workforce of independent contractors. However, the legal distinction between a contractor and an employee can be complex and is under increasing scrutiny. This can lead to risks such as lawsuits for misclassification, which can result in significant financial penalties, back pay, and benefits. Specialized insurance can offer protection against these legal challenges and the associated costs, helping to ensure the stability of your business model.

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Protecting Against Unique Liability Exposures

The very nature of on-demand services creates distinct liability risks. For example, a rideshare company faces risks related to accidents, while a home services platform may encounter property damage or injury claims. Standard business insurance policies often do not adequately cover these unique scenarios. On-demand insurance provides tailored coverage for commercial auto, general liability, and professional liability, ensuring that your company is protected from the specific risks inherent to its operations.

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Enhancing Credibility and Trust

In a competitive marketplace, trust is a critical differentiator. Having comprehensive insurance demonstrates to users, partners, and investors that your company is responsible and prepared for unexpected events. It provides peace of mind to customers who are using your services, knowing they are protected in case of an incident. This can significantly enhance your brand’s reputation, attract more users, and build long-term loyalty.

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Attracting and Retaining Quality Workers

Insurance can also be a valuable tool for attracting and retaining the best talent in the gig economy. By offering robust insurance solutions, such as occupational accident coverage, on-demand companies can provide a safety net for their contractors. This goes a long way in showing that you value your workers’ well-being, which can lead to a more reliable and motivated workforce, lower turnover rates, and a stronger position in the competitive labor market.

On-Demand Insurance Coverage & Policies

These coverages form the foundation of any risk management program for on-demand companies:

general liability
General Liability Learn More
General Liability

The potential of a customer being injured while operating a scooter or bike is the biggest risk facing the micromobility space. In addition to the need to insure yourself against this risk, it’s crucial to know that this coverage will be required in at least $1M per occurrence and $2M in the aggregate in every city you wish to operate. Most cities will actually require more.


workers compensation
Workers’ Compensation Learn More
Workers’ Compensation

When employees sustain work-related injuries, employers are typically responsible for their medical costs and lost wages. This policy covers these expenses, protecting employees while keeping companies running smoothly.


Employment Practice Liability Learn More
Employment Practice Liability

Any company with employees faces the risks of allegations, such as discrimination, wrongful termination, breach of contract, etc. This coverage protects companies against lawsuits related to employment practices. 


Errors & Omissions Learn More
Errors & Omissions

Professional liability, also known as errors and omission (E&O) insurance, covers companies in third-party or client lawsuits claiming substandard work or service. Work errors or oversights, missed deadlines, budget overruns, etc., often result in costly cases — but E&O insurance responds to these mishaps.


Cyber

Cyber insurance protects companies from third-party lawsuits relating to electric activities (i.e., phishing scams). Plus, it offers many recovery benefits, supporting data restoration and reimbursement for income lost and payroll spent.


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Directors & Officers Learn More
Directors & Officers

Shareholders, competitors, investors, etc., can sue a company’s directors and officers, putting their personal assets at stake. Directors and officers (D&O) insurance protects these assets from lawsuits alleging leaders of wrongful acts managing the business.

On-Demand Specific Insurance Coverage

These policies are essential for or can be tailored to the needs of companies operating in the on-demand space:

HNOA

Delivery drivers and couriers often use their vehicles to drop products off to customers. This coverage protects against damages sustained by employees when they use personal vehicles for business purposes.


Intellectual Property
Intellectual Property Learn More
Intellectual Property

Companies are often accused of infringement or face being infringed upon, putting their budget and intellectual property at risk. This policy covers legal fees and offers enforcement coverage, no matter how grounded or not the claim is.


property insurance
Property Insurance Learn More
Property Insurance

Whether it’s a devastating fire, natural disaster, or burglary, property insurance responds. This policy reimburses companies for direct property losses, supporting recovery and momentum.

On-Demand Insurance Costs

The cost of insurance for on-demand companies is highly variable and depends on several key factors. Your company’s size, its revenue, and the nature of your services all play a significant role. An insurer will evaluate your specific risks and the controls you have in place to manage them, such as safety protocols for drivers or background checks for workers, to determine a premium.

The program’s structure, including your deductible and how much risk your company is willing to assume, also influences the final cost. Lastly, your company’s claims history—specifically the number and type of past claims—will be a major factor in calculating the insurance premium.

On-Demand Claims & Examples

Navigating a commercial insurance claim is often challenging, often fraught with confusion and multiple unknown factors. The following four-part series outlines the ins and outs of commercial insurance claims:

On-Demand Insurance Frequently Asked Questions (FAQ)

On-demand companies face a unique blend of operational and legal risks. A primary concern is gig worker misclassification, which can lead to costly lawsuits and significant financial penalties. Beyond that, there are substantial liability exposures related to the services being provided, such as commercial auto accidents for rideshare or delivery platforms, or property damage and bodily injury for home services marketplaces. Cybersecurity is also a major risk, as these businesses rely on collecting and storing vast amounts of user data, making them prime targets for data breaches and cyberattacks.

A proactive approach to risk management is a key factor in reducing insurance premiums. Insurers view companies with strong safety and compliance protocols as less risky. This includes implementing rigorous background checks for workers, conducting regular safety training, and establishing clear guidelines for service delivery. For platforms with a fleet of vehicles, using telematics to monitor driver behavior can also demonstrate a commitment to safety. By showing an insurer that you are actively working to prevent incidents, you can often negotiate more favorable terms and lower premiums.

For on-demand companies that involve the use of vehicles, such as food delivery or ridesharing, a standard personal auto insurance policy is typically not enough. Most personal policies have an exclusion for commercial use, meaning any accidents that happen while a driver is “on the clock” would not be covered. This leaves both the driver and the company exposed to significant financial and legal liability. A commercial auto policy is specifically designed to cover these business-related risks, protecting against property damage, bodily injury, and legal fees resulting from an accident, thereby safeguarding the platform’s assets and reputation.

On-Demand Insurance Quotes

Finding on-demand insurance coverage doesn’t have to be painful. We aim to make the purchasing experience as streamlined and intuitive as possible.

1
Get a quote

Use our custom-built digital platform to get quotes fast. We automate clerical tasks that plague traditional insurance brokerages, giving us more time to be responsive and alert to your company’s needs.

2
Pair with a specialist

No two organizations are the same. Our team of coverage experts partners with your team to engineer your risk management strategy, together. We take the time to understand the intricacies of your company to get you the best possible coverage.

3
Stay one step ahead

To do better, you need to know better. With changing political, technological, legal, and economic landscapes, staying ahead of the curve is critical.

Our in-house team is tapped into the latest developments in your industry, proactively ensuring you’re covered.

Schedule Time with an On-Demand Expert

Risk Calibration

Let’s figure out if you’re under- or over-insured and whether your current policies have detrimental gaps.

Identify Cost Savings

We’ll compare your current policies with our extensive benchmarking database to see if your risk and costs have kept pace.

Risk Calibration

Walk away with a detailed plan to manage risk as your company scales — no strings attached.

Why Choose Founder Shield?

Founder Shield is a leading insurance provider that specializes in offering comprehensive coverage for high-growth companies, offering numerous benefits and advantages over traditional insurance providers. Here’s a breakdown of some of the key features and benefits that you’ll enjoy with us:

Benefits of Choosing Founder Shield
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Industry Expertise

Founder Shield is focused on protecting rapidly evolving on-demand startups. We ensure that our products are tailored to meet the unique needs of on-demand companies.

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Customized Solutions

Founder Shield offers bespoke insurance policies that are designed specifically for each client’s needs, ensuring comprehensive coverage that addresses the unique risks associated with on-demand operations.

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Fast Quotes

With Founder Shield’s streamlined quoting process, you can receive a personalized quote for your on-demand insurance quickly, allowing you to make informed decisions fast.

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Ease of Use

Founder Shield’s user-friendly digital platform makes it easy to manage your insurance policies, submit claims, and access important documents whenever you need them.

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Dedicated Support

Founder Shield provides exceptional customer service, with dedicated account managers who are always available to assist you with any questions or concerns you may have about your insurance coverage.

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Scalable Coverage

As your business grows, Founder Shield’s insurance policies can grow with you, ensuring you always have the right level of coverage for your changing needs.

Founder Shield is a preferred choice for on-demand businesses because of our specialization in the industry. We offer flexible and customized insurance policies, a speedy quoting process, and exceptional customer service with dedicated account managers.