Alaska House panel debates insurance gaps for gig delivery drivers

The Alaska House Labor and Commerce Committee heard testimony on Senate Bill 35, which would establish when delivery network companies like DoorDash and Uber Eats must provide insurance coverage for drivers. Supporters said the bill addresses insurance gaps that have left some Alaska gig workers uninsured after accidents.

The bill requires $1 million in liability coverage when drivers are actively delivering. Under current practice, personal insurance companies often deny claims when drivers have delivery apps open, even when no delivery has been accepted. However, testimony indicated that personal insurance could cover that period if the policy does not exclude it, likely through an endorsement.

Senator Jesse Bjorkman, who introduced the bill, explained the problem to the committee. "What is happening is the Property and Casualty Insurance Trade Group and kind of their national standard is that when a courier is driving around and they have their app open, that they essentially are working and using their car for commercial purposes," Bjorkman said. "At that point in time, then people's personal insurance, they do not cover the driver."

Bjorkman said he has had constituents who have been in significant accidents, wrecked their cars, and been hurt with no insurance because their personal auto insurance canceled their policy.

The committee substitute would require delivery network companies to provide coverage when a courier accepts an offer. Coverage continues while the courier transports the requested item and ends when the courier completes the delivery or the delivery is canceled. The bill also includes language in Sections 11 and 12 that would cover a courier immediately following delivery while available to receive another offer but not providing delivery services. Committee members discussed that the phrase "immediately following" is open to interpretation.

Committee members raised concerns that the ambiguous language could incentivize drivers to leave the app open indefinitely to maintain company coverage.

Heather Carpenter, director of the Division of Insurance, told the committee that personal lines insurance could cover the period when the app is open before a driver picks up a delivery, but drivers would need to ensure their coverage does not exclude that period, likely through an endorsement. "Our statutes do not say they can, that the insurer can preclude that time. It does not say they cannot. So it is silent on that part," Carpenter said.

Committee Chair Zack Fields said the change to track when the app is open came at the request of one of the delivery network companies because they thought it was easier to administer than trying to judge when a delivery run starts and ends.

The bill creates different insurance requirements for transportation network companies like Uber and Lyft versus delivery network companies. For transportation network companies, coverage begins as soon as the driver logs onto the app, with state minimum liability limits. Once they accept a ride, coverage increases to $1 million in liability and $500,000 in uninsured and underinsured motorist coverage, which transportation network companies cannot waive. For delivery network companies, the higher coverage only applies when actively providing delivery services, and uninsured and underinsured motorist coverage is not required.