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Committee hears sponsor explain insurance triggers for ride-hail and delivery drivers
Summary
Lawmakers heard a committee substitute for a bill that would require delivery network companies to carry primary liability and occupational coverage while couriers provide services and clarified when transportation-network company coverage applies. Members pressed sponsors on whether 'app-open' coverage will incentivize drivers to stay logged in.
The House Labor and Commerce Committee on Wednesday heard discussion of a committee substitute for Senate Bill 35 that would set insurance coverage triggers for transportation network companies (TNCs) and delivery network companies (DNCs).
The bill sponsor told the committee the CS treats three periods differently: when a driver is logged off (personal auto insurance applies), when a driver is logged on and available (period 1), and when a driver is providing a prearranged ride or delivery. Under the CS, when a courier is providing delivery services the delivery network company must maintain primary automobile liability insurance (described in the CS as $1,000,000) and occupational/accident coverage. The sponsor also said uninsured and underinsured motorist coverage is not required for delivery network company drivers under the CS.
"When the courier is providing delivery services, the delivery network company must maintain primary automobile insurance," the sponsor explained during his opening remarks, noting the CS includes liability and occupational-accident limits.
Why it matters: committee members said the measure is an attempt to fill an insurance gap that can leave drivers and crash victims without clear coverage, particularly where personal policies exclude claims for commercial activity. Lawmakers debated whether the CS’s approach — which treats some DNC activity differently from TNC activity — will reduce costs for delivery firms while protecting public safety and passengers.
Division of Insurance Director Heather Carpenter briefed the committee on how personal auto policies currently operate and how the CS would interact with existing law. Carpenter said current law allows insurers to exclude coverage while a driver is logged onto a TNC digital network, and the CS contemplates adding similar treatment for couriers when they accept or are en route to delivery jobs. "A personal lines insurance could cover that period when the app is open before they pick up a delivery," Carpenter said, and she recommended drivers ensure endorsements cover the relevant period.
During questions, several representatives pressed how the CS defines the start and end of coverage. Members asked whether the language — which treats some DNCs differently in the "delivery available" period — could incentivize drivers to keep apps open to obtain coverage, and whether companies that operate both ride-hail and delivery services (for example, a firm with both TNC and DNC functions) would be uncomfortably treated across two standards.
Sponsor staff and the division said the CS was written to accommodate differing business models and stakeholder input. The sponsor said the CS deviates from the NCOIL (National Conference of Insurance Legislators) model in order to provide flexibility for some delivery network companies and to address Alaska’s prior lack of a comprehensive delivery-network framework.
Next steps: the committee set an amendment deadline for Senate Bill 35 at Tuesday at 5:00 p.m. The committee did not take a final vote on the bill during this meeting.
