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Mobile app opens three routes of risk: on-duty, off-duty, cyber

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Ride-sharing insurance for drivers working with San Francisco-based Uber Technologies Inc. is essentially divided into three parts.

The first applies when the app that calls drivers to jobs is turned off, and the driver is covered by his or her personal auto insurer.

When a ride-sharing driver is available but between trips, most personal auto insurance will provide coverage. But if the driver does not have applicable coverage, Uber provides the driver liability insurance for bodily injury up to $50,000 per individual per accident, with a total of $100,000 per accident, and up to $25,000 for property damage.

From the moment a driver accepts a trip to its conclusion, Uber provides $1 million in liability coverage per incident.

The driver also has $1 million of uninsured/underinsured bodily injury coverage per incident: If another motorist causes an accident with a ride-sharing vehicle and does not carry adequate insurance, Uber's insurance covers bodily injury to all occupants in the ride-sharing vehicle.

Contingent comprehensive and collision insurance also is available. If a ride-sharing driver holds personal comprehensive and collision insurance, Uber's contingent insurance covers physical damage to the vehicle that occurs during a trip up to the actual cash value of the vehicle, for any reason, after a $1,000 deductible.

In addition, in jurisdictions where there is no-fault coverage, insurance is provided at similar levels as for limousines or taxis in those cities.

Surplus lines insurer James River Insurance Co. is the primary provider of Uber's coverage.

While Uber also does business with a captive insurer, it declined to provide details of the protection provided by the captive.

For its cyber issues, Uber focuses on prevention, said Gus Fuldner, its head of insurance.

“We have hired a very, very strong (information technology) security team, particularly over the last year or so, and so I think that's really the first defense,” he said. “Beyond that, we do have cyber liability insurance, but are really focused on not having the breach to begin with, which is the first order of business.”

American International Group Inc. is Uber's lead cyber insurer, according to Uber.

Uber has received some unwelcome publicity with respect to crimes committed by Uber drivers. In February in Kalamazoo, Michigan, for instance, Uber driver Jason Brian Dalton reportedly killed six people and injured two more in a nearly seven-hour shooting rampage.

“There's certainly unfortunate things that happen,” said Mr. Fuldner. “We can do lots of background checks,” but even with all the due diligence, “you can't prevent everything bad from happening.”

Another area of controversy that has frequently landed Uber in the news is the question of whether its drivers are employees or independent contractors. Mr. Fuldner was reluctant to comment beyond saying “the impact on auto insurance coverage is very minimal. The auto insurance policy doesn't hinge on employment itself.”