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Electric Scooters and Liability Concerns for Startup Owners and Their Employees

With Electric Scooters Taking Over Urban Cities, It’s Important for Startup Owners to Understand Their Risks When Employees Use Them As Transportation…

Me on one of the many electric scooters in downtown Austin

Scooters are everywhere in urban areas all across the nation, and it does not look like they are going anywhere in Austin anytime soon. This month we discuss personal and business liability involved with riding an electric scooter.  Then we answer the more important question of how insurance will respond. As a bonus we also share a few key safety tips.

Personal Liability

Have you read through the ‘Rental Agreement’ from your favorite scooter company? Most likely this is not something you have not referenced since downloading the app and taking your first ride. Here is a copy of one from Bird just in case you wanted to take a look: click here. The words following ‘Rental Agreement’ happens to be ‘Waiver of Liability and Release.’ To be clear, this means you are personally responsible for anything that happens on the scooter.
The Insurance Council of Texas released a video regarding your personal liability when riding a scooter. Here are two key take away points from the video: You assume all liability and your personal insurance policies are NOT likely to respond. Click here to watch the video.

Will My Personal Insurance Cover Me?

The Insurance Information Institute wrote a blog titled, E- SCOOTER SHARING PROGRAMS: ARE YOU COVERED?  about this. According to the article, a Homeowners/Renters Insurance policy won’t cover self-propelled vehicles.  The logic is a personally owned vehicle should be covered on a personal auto policy. At the same time, the standard personal auto policy excludes liability coverage for a vehicle with fewer than four wheels. The only place an individual might have liability coverage is a personal umbrella. Everyone has one of those, right? [crickets chirping]

But What About Business Liability?

A question from business leaders that has not been fully answered is, ‘Am I covered if an employee hurts themselves or someone else while riding a scooter on company business?’ The likely scenario is a sales person going on a sales meeting in downtown Austin on a scooter. To be clear, this has not been fleshed out by carriers, claims professionals, or lawyers, but here a few places to look for coverage.

Workers Compensation

Since workers compensation is designed to be the sole exclusive remedy for all work-related injuries, it appears this is a starting point for employees injured in the course of their work. Workers compensation will not pick up coverage if the employee is injured on a daily commute, but it would likely pick up the medical bills and lost wages if injured while taking a scooter to a business meeting.

Commercial Auto: Depends Upon What the Meaning of the Word ‘Is’ Is

If you notice on Bird’s Terms of Use, they refer to the scooter as a ‘vehicle’. But how does an insurance carrier classify a scooter? In short, they don’t, but different carriers have different definitions of an ‘auto’ with room for interpretation. For example:

Despite not having a 4-wheel requirement, a commercial auto policy will likely decline a scooter liability claim since it can be argued that an electric scooter does not fit the definition or intent of the definition of an ‘auto’. It will also depend on state and city laws since in some cities scooters are not designed for travel on public roads. This is something to keep an eye on as more claims are processed on the insurance side and lawyers get involved with what ‘is’ is.

Commercial General Liability

As far as standard Insurance Services Office (ISO) forms read, the General Liability (GL) could pick up liability. For example, if your employee injures a sweet old lady on the sidewalk in route to a sales meeting on a scooter who pays her medical bills? From a business perspective this is not something specifically excluded on the standard special form policy so there could be coverage.
Some tech companies are aware of the risks here and have created a company policy prohibiting the use of scooters for company business to avoid the situation. This is to protect themselves and their employees but certainly not fool proof.
The theme here regardless of the line of commercial coverage is we have not seen a lot of claims data related to claims involving scooters. As more information is released on claims and coverage this will get ironed out. Don’t be surprised if we see the classification of a scooter more clearly defined on an insurance policy or completely excluded.

Scooter Safety and The Rules of The Road

There were no deaths involving a scooter in Austin until recently. Unfortunately, a 21-year-old male was killed in Austin traffic while riding a Lime dockless scooter near 6th Street as reported by multiple sources. So in the spirit of prevention, here are some tips:

  • First time riders of scooters should be aware of their own skills before attempting to ride one. Check out this video of how not to take your first ride: Click here. If you have never taken a ride on a scooter, perhaps rush hour traffic downtown in flip flops without a helmet is not a good idea.
  • Wear a helmet. Bird gives a free helmet if you click on Safety in the app. You pay for shipping but it is worth the $2.
  • Don’t drink and scoot. According to Austin Police, riding a scooter while drunk can lead to a DWI. If you are drinking, there is a good chance it will be dark outside as well. Two factors that could affect the safety of your ride.
  • Scooter riders should always follow traffic signals and signs. This also means to go with the flow of traffic and not against it.
  • Bikes and scooter use on sidewalks is generally OK.  Remember to yield to people walking on the side walks or crosswalks.
    You can read more tips from: What Are The Rules Of The Road For Scooters In Austin? and Austin Mobility Services.
A colorful graphic that outlines the "rules of the road" for electric scooter users: one person per scooter, yield to people walking, bicycling and people with disabilities, wear a helmet for safety, don't ride on parkland, don't ride while under the influence of intoxicants, and park scooters with care.

Electric Scooters. Be informed. Be safe.

Illustrated graphic showing how Austin e-scoots: one person per scooter, wearing helmets for safety, riding in the bicycle lane or vehicle lane, scooting respectfully on the sidewalk, etc.

How Austin E-Scoots

In Summary

Since individuals and businesses can be held liable for scooter incidents, it is in everyone’s best interest to keep Austin safe. Know the risks or riding and ride safe out there.

About Lumen:

Lumen Insurance Technologies is a tech-focused commercial insurance agency based in Austin, Texas. Lumen is hyper-focused on providing the technology startup ecosystem with quality commercial insurance coverage (e.g. D&O, E&O, Cyber, etc.) following a funding event and beyond.

Check us out on the web at www.lumeninsure.com to find more blog topics, general info,  or to get help with finding coverage. Email us at info@lumeninsure.com if you would like to suggest a topic for future blogs.

Connect with us and stay up to date with news from our client base by following us on InstagramLinkedInTwitter, and Facebook.

Houston-based MacroFab Names Misha Govshteyn as CEO

MacroFab, a Houston-based electronics manufacturer is excited to announce that board member, Misha Govshteyn has moved into a new role as Chief Executive Officer where he will continue to focus on disrupting the $480B electronics manufacturing industry.

For the past three decades, nearly all investment in electronics manufacturing has gone into machinery and design tools, while little investment has been made to improve the interface between the customer and the factory floor. The traditional customer interface consists of decades-old processes that include emailing for quotes, working with overseas manufacturers that could lead to communication breakdowns and the risk of losing intellectual property to the black market.

MacroFab’s team of software developers have built an online platform that enables their hardware customers to get instant quotes, which effectively eliminates thousands of hours of back-and-forth communication with sales reps. MacroFab offers a mutual NDA to keep IP safe, and their responsive customer success team boasts an outstanding average NPS score of 57.

“MacroFab has built a software platform for hardware teams to get their product to market faster and with greater control than ever before, and I’m excited about the opportunity to grow our market, both with our customer-base and our network of factories,” Govshteyn said.

Hardware companies with high volume manufacturing needs can access MacroFab’s network of connected factories to scale their products faster and with greater control. This network means that customers won’t have to wait in a manufacturing queue to get their products built, and it occupies factories’ (both international and domestic) unused capacity, keeping business flowing.

“Our platform is creating the first marketplace for electronics manufacturing, Govshteyn said. This will simultaneously open up capacity for our hardware customers while creating more demand for idle factories.”

MacroFab is the only startup focused on full product delivery at scale. Currently, there is a gap for middle market manufacturers in this industry and Govshteyn believes it’s primed for disruption.

“What we’re seeing is a lot of large manufacturers that make prototyping and mid-volume production expensive for many small businesses and startups,” Govshteyn said. “MacroFab is making it affordable and more accessible for these businesses to get started and quickly scale their business. They can prototype with us, and manufacture units in the hundreds of thousands through one platform, all at globally competitive prices,” he continued.

MacroFab was founded in 2013 by Chris Church, former CEO, who is now the Chief Product Officer. Since 2013, MacroFab has raised $5.7M in funding from various VCs and is currently pursuing another round of funding. MacroFab’s key platform capabilities include greater command and control from a customer standpoint; orchestration of logistics; virtualization of capacity and manufacturing standardization. For more information, visit MacroFab.com.

The Office ‘Non-Denominational Holiday Mixer’: Tips for keeping Everyone Safe and Out of Trouble During the Company Holiday Party

There is a reason why Saturday Night Live (SNL), The Office, and Office Christmas Party poke fun at office ‘Non-denominational Holiday Mixers.’  Feel free to watch any of these videos at your own risk to see what I mean. It is the corporate world’s attempt to be inclusive while employees cut loose in celebration for various reasons. Because each company’s culture is unique, there is no right way to do this.  In this month’s blog, we give a few tips for the startup community to keep everyone safe and reduce risk.

Driving, Biking and Scooting Home

Making sure everyone gets home safely is by far the biggest concern executives should have when throwing a holiday party. The best tip here is to ask employees to use a ride share or take a taxi if they plan to consume alcohol. Some employers go to the extent of providing shuttles, ride share vouchers or by allowing employees to add rides to their expense reports. Scooters and electric bikes are the new craze, but keep in mind that it is illegal to ride them while intoxicated and dangerous to ride. Even if your employees have not had a drop to drink (and brought their helmet to the party), riding at night is not advised.  Potholes, curbs and other crazies on the road can be just as hazardous. Encourage everyone to have a plan prior to the party to avoid any game time decisions. We want to see everyone get home safely this holiday season!

Alcohol and Liability

Alcohol is part of many cultures in the startup community. The two biggest tips from a risk management standpoint are to use 3rd party vendors that carry liquor liability insurance and to have TABC certified servers serving alcohol. Using vendors who are in the business of serving alcohol and are trained to identify when someone has been over served shifts the liability off of your company and places it primarily on them. Be sure to ask for a certificate of insurance to verify they have liquor liability in place and not just general liability.

The next tip is to create an environment that encourages alcohol consumption in moderation. People tend not to over serve themselves when it is a cash bar vs an open bar. We have all been to parties where two or three drink vouchers are offered per person. Clearly this is not foolproof, but it helps limit how much the company is contributing towards consumption. Another tip is to limit the amount of time the bar is open. The longer the party, the more opportunity people have to consume alcohol. Shutting the bar down for about 30 minutes or 1 hour before the party ends is a good idea as well. The last tip is to make sure there are non-alcoholic drinks and food available throughout the night. This seems like a no-brainer, but making sure everyone has an option to drink something besides alcohol and offering food to fill their bellies is a good idea.

Holiday Traditions and Decorations

In today’s environment, companies even struggle over what to call the party. There are varying stances on this, but the bottom line is to be sure to consider the diversity and culture of your company when deciding what to call your party. You can attempt to be inclusive and call it a Christmas, Hanukkah and Kwanzaa party while unintentionally being exclusive to the folks who don’t celebrate any of these. Most companies are sticking with ‘holiday party’ but the title of this blog comes from the term the fictional company in Office Christmas Party came up with to make the party feel ‘more inclusive.’

Even if you call it a holiday party but put up a nativity scene with baby Jesus or a Menora, it can send the wrong signal. Some companies form a diverse planning committee on this to make different faiths feel represented in the planning process. Some company cultures might be okay with including symbols of all religions while others might prefer leaving them out completely.

The last tip here is to make the party completely voluntary with no judgement or repercussion for not attending. Even calling it ‘highly encouraged’ can have a bad connotation. It is hard to please everyone. Perhaps an individual has a religious conflict, a struggle with alcohol or a phobia of driving at night. Making sure the party is completely voluntary without judgement or repercussions gives someone an out.

How Does All of This Affect Insurance?

The most common question I get during the holiday season is what does my liability policy cover.

General Liability: From a general liability viewpoint, a company can be held liable if the proper precautions are not taken and someone is hurt from a drinking and driving accident after the party. This is why it is important to use third party vendors who are insured to serve alcohol. You may see that liquor liability is excluded on your general liability policy.  Keep in mind that liquor liability is excluded for companies who are in the business of manufacturing, selling or serving alcohol.  Since you are a tech company, this exclusion would not apply.

Employment Practices Liability: This is essential to a policy covering all HR issues related to the party. Discrimination and sexual harassment claims are possibilities here. We discussed discrimination based on religion above, but we have not discussed sexual harassment. Even with the best of intentions, alcohol can impair judgement. Perhaps an employee says something inappropriate to a co-worker or gets overly aggressive on the dance floor, making another employee feel uncomfortable. This is why it is important to make sure your employment practices liability policy is in place.

Our tip here is to ask your legal counsel about your liability and agent if you have questions about coverage for your holiday party.

Summary of Top Tips:

– Be cognizant of your company’s diversity and culture during planning
– Encourage everyone to have a plan for getting home prior to the party
– Encourage the use of a ride share such as Uber of Lyft
– Don’t ride scooters or electric bikes after drinking at night
– Use third party vendors and TABC certified servers
– Make it a cash bar or use drink tickets drink vouchers
– Don’t make it mandatory or ‘highly encouraged’
– Ask your lawyer or commercial insurance agent if you have questions

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About Lumen

Lumen Insurance Technologies is a boutique commercial insurance agency based in Austin, Texas. Lumen is hyper-focused on providing the technology startup ecosystem with quality commercial insurance coverage (e.g. D&O, E&O, Cyber, etc.) following a funding event and beyond.
Check us out on the web at www.lumeninsure.com to find more blog topics, general info,  or to get help with finding coverage. Email us at info@lumeninsure.com if you would like to suggest a topic for future blogs.

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