Committee passes bill requiring $1 million insurance for delivery and ride-hail companies, limits vicarious liability

A Nevada legislative committee voted unanimously during a hybrid hearing to pass Assembly Bill 523, which requires delivery network companies (DNCs) and transportation network companies (TNCs) to carry $1 million in liability insurance and removes vicarious liability for those companies for incidents occurring after Oct. 1 of this year.

The bill’s sponsor and staff walked the committee through the measure’s sections. Section 2 defines DNCs and sets the statutory framework for delivery services; subsection 2.9 requires DNCs to maintain $1 million in coverage and describes claims that may be made. Committee staff said the same insurance requirement is later applied to TNCs in section 3. The measure removes vicarious liability — the rule that would let a company be sued solely because its driver committed a wrong — so long as the company carries the $1 million policy. Subsection 4 of section 2.9 explicitly preserves other theories of liability, meaning direct claims against companies remain available.

Julianne King, committee policy analyst, summarized the bill and its structure for the record. Allison Brazier, who spoke during the hearing, described why a uniform insurance requirement applied to delivery services: she said delivery services increase the number of personal vehicles on the road performing for-hire deliveries and "we wanted to just make sure that that additional traffic and those additional risks were covered by adequate insurance." Brazier also explained how personal auto policies generally do not cover commercial use, saying, "Most people's personal insurance policy, if they're doing business that specifically does not apply. And so it would be just be the Uber coverage."

Josh Griffin, testifying on behalf of Uber, said the company supported the bill and praised the work done on it: "we stand obviously in strong support of this bill and, appreciate all the work that went into it." Senator Buck asked for clarification on who provides the $1 million when a driver is active; Griffin answered that Uber provides the insurance "when the driver has the app on and a passenger."

The committee closed the public hearing on AB 523, moved into a work session, and a motion to do pass the bill was made by Senator Donate and seconded by Senator Hansen. The committee chair called the vote; the motion carried unanimously. The chair stated they would prepare the floor statement and move AB 523 forward.

The bill text preserves the ability to bring direct claims against companies such as Uber, Lyft, Uber Eats and Grubhub; it limits only vicarious liability when the insurance condition is met. The bill also applies prospectively: the committee record notes causes of action that arose before Oct. 1 of this year are excluded from the bill’s vicarious-liability changes.

The committee record shows no callers in support, opposition, or neutral testimony on the phone lines during the hearing. With the committee’s unanimous vote, AB 523 will be reported out of the committee to the next legislative step.