Following up on my Deaths on Airbnb post, BuzzFeed ran a story recently about a woman who lost a leg in a boating accident while renting through Boatbound, a peer-to-peer boat rental site.  The woman is now suing Boatbound, the boat owner, and a friend of hers who was operating the boat during her accident because none of their insurance policies will pay out for her expenses.

motor boat

This tragedy underscores a few issues for sharing economy businesses related to insurance. Boatbound offers up to $1M in insurance to cover all rentals, but in this case the woman rented a boat and signed a contract agreeing to be the sole operator, and then it was her friend at the wheel (while she was in the water) during her accident. So Boatbound is claiming she was in breach of contract.

The lawsuit also claims that Boatbound should have enforced more safety requirements on the boat owner, some of which could have saved the woman’s leg by helping facilitate faster rescue. But the boat met all legal safety requirements so making this demand of Boatbound may be a bit of a stretch.

In the case of the boat owner, his personal boat insurance policy refused to cover the accident because it happened during commercial use of the boat. This is a risk of renting out personal property like cars and boats through sharing economy websites.

insuranceInsurance companies are partnering with peer-to-peer taxis like Uber and Lyft, and as boat rentals and other sharing economy segments grow I think we can anticipate more comprehensive coverage and better understanding of terms and exclusions. This doesn’t help prevent tragic accidents, but it should provide greater peace of mind to those who are renting out their car, boat or other equipment as well as to the renters. Both sides need to make sure they are covered in case of unforeseen events, especially in such a litigious country as the United States.