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Sharing economy micropreneurs face unique commercial risks
Sharing economy micropreneurs face unique commercial risks
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    With ride-sharing companies issuing IPOs and financial vehicles like Solo 401(k)s growing in popularity, it’s clear that the sharing economy in the US is thriving. One segment in particular that is experiencing a surge: homesharing. 
    • More than 44 million adults in the U.S. were consumers of sharing economy services in 2016. This number is expected to increase to over 86 million by 2021.1
    • There are more than 6 million Airbnb listings worldwide.2
    • More than 200 million bookings have been made with the popular Airbnb homesharing service in the US since the company launched in 2008.3
    A large segment of homesharers and other entrepreneurs who make up the sharing economy engage in commercial commerce on a very small scale. These individuals are commonly known as micropreneurs. They often conduct business part-time or at their discretion, and do so in an effort to supplement other streams of income. Many micropreneurs conduct business through a larger corporate entity. 

    Examples include people who offer services such as:

    • Ridesharing through companies like Uber and Lyft
    • Homesharing through companies like Airbnb
    • Knowledge/talent sharing through sites like Fiverr and Upwork
    • Peer-to-peer lending and crowdfunding through sites like Kickstarter and Indiegogo
    • Coworking through companies like WeWork
    • Online reselling and trading through sites like eBay, LetGo, and Etsy

    Although the micropreneur conducts business on a smaller scale, they are still exposed to commercial risk, i.e., things like loss of business income (fare/rent/fees), higher liability exposure (larger damage awarded) due to commercial activity, potential for error, and omission allegations for services rendered. These individuals fall into a coverage gap. Their commercial operation is too small for an expensive commercial policy but falls outside of the traditional low threshold of commercial activity excluded under a personal lines policy.

    Herein lies the opportunity: Insurance carriers have this exposure in their portfolios already. Now it’s a matter of providing coverage options for their policyholders at competitive rates. This also presents an opportunity for carriers to start educating their policyholders about their elevated risk profile and discussing the solutions that can be made available to them.

    Munich Reinsurance America Inc. has developed an innovative, white-label product for homesharers in the U.S. that addresses the commercial risks this segment of the sharing economy is exposed to. Eligibility for coverage includes owner-occupied homes, rental units or condos, and select secondary seasonal homes.

    Our endorsement provides protection beyond the traditional homeowner’s insurance policy. These protections include:

    • Pest-control expenses
    • vandalism to property
    • water leakage liability
    • excessive utility costs

    Major exposures covered include:

    • damage to home and personal property
    • medical expenses for guests
    • guest property damage
    • theft on rented premise
    Our comprehensive homesharing protection helps insurers bridge the gap between personal and commercial coverage, and it can be easily combined with a homeowner’s existing policy. Our product features full-service capability for pricing, endorsements, underwriting guidelines and guidance, claims training, filings, and marketing support. It also includes 100% quota share cession on a multiyear or continuous contract basis. Protecting personal property from unique hosting risks has never been easier. 
    Visit or contact Jason Dunn, Strategic Product Development Manager, at to learn more about our homesharing endorsement. 
    Our expert
    Jason Dunn
    Jason Dunn
    Strategic Product Development Manager
    Munich Re US

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