While convenient, ridesharing services like Uber and Lyft have raised several questions about liability in the event of an accident. One common question is whether rideshare drivers can be sued in their personal capacity if they’re involved in an accident. In this blog, our rideshare accident lawyers aims to shed light on this complex topic and help passengers and drivers understand the legal implications and how they might affect a potential car accident lawsuit.
Rideshare Driver Liability
It’s essential to know that rideshare drivers are typically considered independent contractors, not employees of the rideshare company. This classification has significant implications for understanding rideshare driver liability.
Generally, rideshare drivers can be held personally responsible for accidents they cause while transporting passengers. However, the specifics surrounding liability can vary depending on the driver’s status at the time of the accident and the level of insurance coverage in place.
Rideshare Driver Status
Rideshare companies usually divide a driver’s time into three phases, each with its own level of company insurance coverage. The three phases are:
- Phase One: The driver is logged into the rideshare app but hasn’t accepted a ride request.
- Phase Two: The driver has accepted a ride request and is en route to pick up the passenger.
- Phase Three: The driver has picked up the passenger and is transporting them to their destination.
Insurance Coverage and Its Impact on Personal Liability
Rideshare companies generally provide some level of coverage for their drivers, but the level of coverage provided varies depending on the driver’s status at the time of the accident.
During phase one, the coverage is limited and may only include liability coverage for injuries to others and property damage. Most rideshare companies advise drivers to retain their auto insurance to cover their private damages during phase one.
During phases two and three, the coverage provided is more comprehensive and can include liability coverage, uninsured or underinsured motorist coverage, and conditional collision coverage.
The coverage may not be sufficient depending on the policy when the accident occurs, especially if the damages exceed the policy limits, in which case the driver’s private assets may be jeopardized.
When Can a Rideshare Driver Be Sued Personally?
A rideshare driver can be sued personally in several scenarios if they caused an accident that led to injury or personal property damage. These scenarios include:
- If the accident occurs during phase one and the damages caused exceed the limited coverage provided by the rideshare company.
- If the damages from an accident during any phase exceed the combined limits of the rideshare company’s and driver’s auto insurance policy.
- If the driver caused an accident due to reckless or illegal behavior, such as driving under the influence of drugs or alcohol or texting while driving.
- If the driver has not maintained their vehicle correctly, leading to a mechanical failure that causes an accident.
- If the driver acts outside their agreement with the rideshare company, their insurance policy will not cover the driver.
What Passengers Need to Know
For passengers using rideshare services, it’s essential to understand the potential avenues for compensation in the event of an accident. An injured passenger may be able to seek damages from:
- The rideshare company’s insurance policy.
- The driver’s private auto insurance.
- The passenger’s insurance.
- A personal lawsuit against the driver.
It’s crucial to note that pursuing a personal lawsuit against the driver can be a lengthy and complicated process with an uncertain outcome. Therefore, passengers should consider a personal lawsuit as a last resort should all other avenues fail to yield results.
What Rideshare Drivers Need to Know
Given the potential risks, rideshare drivers should consider taking steps to protect themselves from personal liability. There are several ways this can be done, including:
- Maintaining sufficient personal auto insurance.
- Purchasing additional liability insurance or umbrella insurance to supplement personal auto insurance.
- Always follow road rules and strictly adhere to rideshare company policies to avoid breaching their agreement.
- Keeping detailed personal records of all rideshare activities, including logs of when the app is active and when rides are in progress.
- Considering alternative ways to separate personal assets from business assets, such as forming a limited liability company (LLC).
The Role of Rideshare Companies
While rideshare companies provide some coverage, they generally rely on their drivers being considered independent contractors, not employees. This distinction attempts to limit the company’s liability in accident cases.
However, it also means the company has very little responsibility towards its drivers, so the classification is being challenged nationwide. Should this change in the future, it can significantly impact accident claims involving rideshare drivers.
Key Takeaways for Rideshare Passengers and Drivers
Whether rideshare drivers can be sued personally does not have a simple answer. While personal liability is possible, the specific circumstances, including the driver’s status, coverage, and the context of the accident, all play crucial roles in determining liability.
Being aware of the legal complexities can help passengers make informed decisions about potential lawsuits and know what to expect in the event of an accident. Rideshare drivers should understand the nuances of insurance coverage and take proactive steps to protect themselves—an essential aspect of being a driver.
If you’ve been involved in an accident involving rideshares as a passenger or a driver, contact HHJ Trial Attorneys for support throughout the legal proceedings that may follow. You do not need to face this situation alone. Our highly experienced attorneys stay abreast of all legal developments surrounding rideshare companies.
