ISO has made two countrywide filings in response to the increasing use of Transportation Network Companies (TNCs) such as Uber and Lyft by PAP and PUP insureds driving for these organizations:
PAP Forms Filing PP-2015-OTNFR
“Introduction of a Reinforced Public or Livery Conveyance Exclusion and Related Optional Coverage Endorsements”
· PP 23 40 10 15 – Public Or Livery Conveyance Exclusion Endorsement
· PP 23 41 10 15 – Transportation Network Driver Coverage (No Passenger)
· PP 23 45 10 15 – Limited Transportation Network Driver Coverage (No Passenger)
PUP Forms Filing DL-2015-OTNFR
“Introduction of a Reinforced Public or Livery Conveyance Exclusion”
· DL 99 12 10 15 – Personal Umbrella Liability Policy Public Or Livery Conveyance Exclusion Endorsement
Each forms filing also has a companion rules filing and the proposed countrywide effective date for these changes is October 1, 2015, though the actual implementation date could vary in specific states.
The Personal Umbrella Policy (PUP) endorsement follows the reinforced Personal Auto Policy (PAP) “public or livery conveyance” exclusion introduced with the PP 23 40 PAP endorsement. There are apparently no options at this time to extend even limited coverage under ISO’s PUP to TNC drivers. This article focuses on the three PAP endorsements.
PP 23 40 10 15 – Public Or Livery Conveyance Exclusion Endorsement
This endorsement revises the existing ISO PAP exclusion for the use of a vehicle as a public or livery conveyance to clarify, according to the filing explanation, that it applies to any period of time that an insured is logged into a “transportation network platform” as a driver and that such exclusion applies whether or not a passenger is occupying the vehicle.
A “transportation network platform” is defined in the endorsement to mean:
“Transportation network platform” means an online-enabled application or digital network used to connect passengers with drivers using vehicles for the purpose of providing prearranged transportation services for compensation.”
The new Part A – Liability Coverage “public or livery conveyance” exclusion reads as follows (new language is highlighted):
5. We do not provide Liability Coverage for any “insured”:
For that “insured’s” liability arising out of the ownership or operation of a vehicle
while it is being used as a public or livery conveyance. This includes but is not limited to any period of time that “insured” is logged into a “transportation network platform” as a driver, whether or not a passenger is “occupying” the vehicle.
This exclusion (A.5.) does not apply to a share-the-expense car pool.
The implication of the language “but is not limited to” is not yet known.
ISO is also making the same revision to the “public or livery conveyance” exclusion that appears in similar form under Part B – Medical Payments Coverage and Part D – Coverage For Damage To Your Auto in the PAP. Since UM and UIM coverages are statutory and provided by state-specific endorsements in most states, ISO is filing a similar change, to the extent permitted by law, to each state’s UM/UIM endorsements.
PP 23 41 10 15 – Transportation Network Driver Coverage (No Passenger)
This optional premium-bearing endorsement would replace the PP 23 40 and, according to the filing explanation, extends PAP coverage to an insured TNC driver for the period of time from when the driver logs into a “transportation network platform” up until a passenger has entered the vehicle.
The endorsement modifies the “public or livery conveyance” exclusions in Parts A, B, C, and D of the PAP. It includes a schedule of the following information:
· Identity of the “transportation network platform(s)” for which the insured drives;
· A description of the vehicle being driven for the TNC(s); and
· A list of the coverages being provided, triggered by a premium entry for each desired coverage.
PP 23 45 10 15 – Limited Transportation Network Driver Coverage (No Passenger)
This optional premium-bearing endorsement would replace the PP 23 40 and, according to the filing explanation, extends PAP coverage to an insured TNC driver for the period of time from when the driver logs into a “transportation network platform” up until the driver accepts a request through the “transportation network platform” to transport a passenger. It obviously differs from the PP 23 41 in that it does not cover the time period between accepting a TNC request and the entry into the vehicle of a passenger.
The endorsement modified the “public or livery conveyance” exclusion in Parts A, B, C, and D of the PAP and includes the same schedule as shown above for the PP 23 41.
Neither optional endorsement extends PAP coverage while a passenger is in the vehicle…a driver with only an ISO PAP must rely on whatever coverage is provided by a TNC. That may or may not include medical payments or UM/UIM for the driver or passenger(s) or physical damage coverage.
Any advice about these endorsements should be provided to insureds with great care. Even under the PP 23 41, the full TNC driver exposure is not fully covered and the insured may not elect to extend limited coverage to all PAP coverage parts. If TNC drivers are independent contractors, they are basically operating a business and might be advised by legal counsel to do so as a corporation or LLC and purchase a BAP rather than rely on a PAP.
In addition, there may be situations where a claim or suit is filed against a TNC driver that is more appropriately addressed by a CGL, BOP or other commercial policy rather than a BAP. For example, a claim for slander, invasion of privacy, wrongful eviction, etc. might be unrelated to the use of an auto and unlikely constitute BI or PD. Since the driver is engaged in a business activity, a homeowners policy would likely not respond.
Last Updated: April 22, 2015