How to Insure the Gig Economy

By 2020, 40% of the U.S labor force will be composed of gig economy workers. Seeking out the flexibility and autonomy afforded by gig work, these workers have fled traditional employment, and in the process assumed higher levels of personal risk. According to our primary research, these workers:

• tend to be underinsured;
• tend to underestimate their own risk; and
• are undereducated about insurance and how it applies to the work that they do

Our Hypothesis As of now, about 15% of gig workers rely on platforms like Uber, Upwork or TaskRabbit to conduct their work. This number is expected to grow. Motivated by the absence of insurance designed for these workers and their general lack of understanding around risk, we thought: What if there was insurance specifically for gig workers, designed around the apps they are already using, which helped them better understand their risk and provided them with some of the security and stability of full time workers? So we did some research, built a prototype and tested it. We learned a lot about the mindsets of gig workers and what they are looking for in an insurance product. Gig workers assume high levels of personal risk by working independently. They are typically not eligible for unemployment benefits, disability or any of the liability protections afforded by a full-time job. Yet many workers are under the impression that either:

• their personal insurance policies–i.e. renters or auto insurance, etc.–will cover them in a time of need
• they don’t need any kind of professional liability insurance or business insurance because they aren’t a small business

Gig workers require education about the risks incurred by their gig work and how different types of insurance relate to this risk. Design Recommendations Design a highly educational homepage that creates awareness for users around the risks and relevant coverages.

1. Balance industry language with an approachable voice/tone that explains what the coverages are and why people need them.
2. Accompany industry language like “supplemental auto” or “business equipment coverage” with relatable descriptions to help users identify how this particular coverage applies to their work and unique risks.

Insight #3: Everything you need to know about a gig worker is already in the app. The gig workers we talked to used apps to perform their gig work. These apps contained personal information, like names and birthdates, but also information about work– ie. how many hours a week someone might work, what their hourly rate is, what kind of car they drive, etc. This kind of information can be used to generate a highly accurate and highly custom quote. Design Recommendations Make gig economy apps integral to your insurance product.

1. Give users an easy and secure way to connect to their gig apps during the quoting process.
2. Be sure to explain the value of connecting the app and how the information from the app will be used to generate an accurate, custom quote based upon real-time data.

Insight #4: Not all gig workers are made alike. Gig workers come from all different walks of life and perform many different types of work, from driving for a ridesharing platform to designing websites. The risks and needs of these workers vary widely, and their insurance coverage should reflect this. Gig workers want custom insurance packages and custom pricing catered to their budget and the unique risks of their particular line of work. Design Recommendations Offer custom policies and coverage based on the kind of gig work that users perform.

1. Specifically address your target audiences and tell them what you have to offer pertaining to their specific risks and needs.
2. Use app data to design coverages that are custom to the unique risks of different kinds of workers.

Insight #5: Gig work is flexible. Insurance should be, too. Gig workers choose gig work for its flexibility and autonomy. They want the same from their insurance. Like the full-time jobs these workers have left behind, most existing insurance products are static and rigid. Gig workers want to do things like:

• turn their insurance off and on
• pay as they go
• adjust their limits and coverages

Design Recommendations Provide different types of workers with different payment options based on the kind of work that they do. For example, giving drivers an option to pay their insurance per mile rather than a flat monthly rate can allow them to save money when they aren’t working. Some freelancers, on the other hand, might like the option to turn their insurance on and off to cover them on a project-by-project basis. See also: Gig Economy: Newest Tool for Insurance   Insight #6: Gig workers want their insurance to be more than insurance. Gig workers may already be paying for a personal insurance policy, may have some limited coverage from the app they are working for or may have some kind of general liability add-on. As one worker we spoke with put it, “so you guys are the third tier.” For gig workers to see this kind of insurance as worthwhile, it needs to:

• be more than “set it and forget it” insurance
• deliver real value to the everyday life of a gig worker
• make gig work easier, safer or more enjoyable by providing something neither their gig apps or their other insurance providers offer

Design Recommendations Aggregate the data gleaned from gig apps to create a dashboard for workers to help them keep track of things like schedules, hours worked, income earned and other trends. This can be particularly valuable to gig workers who are using more than one app. You can find the report published originally on CakeandArrow here.