Illinois Passes Rideshare Legislation with Insurance Component

June 3, 2014

The Illinois Legislature passed legislation this session that provides for regulating transportation networking companies (TNCs) and closing insurance gaps, according to the Property Casualty Insurers Association of America (PCI).

Together HB 4075 and 5331 will establish regulations on TNCs that are like those that apply to other similar commercial driving enterprises, PCI said.

The measures require background checks on drivers, vehicle inspections and chauffeur licenses for drivers who work more than 36 hours in any two-week (14 consecutive day) period.

Additionally, the legislation requires conspicuous disclosure to TNC drivers about insurance coverages provided by the TNC.

“While supporting innovation and competition in the transportation and insurance marketplaces, PCI has been adamant in Illinois and across the country that TNC legislation address the gaps in insurance coverage and ensure that drivers, passengers and the public are protected if there is an accident,” said Jeffrey Junkas, regional manager for PCI. “Key for insurance concerns, the Illinois Legislature is requiring commercial liability insurance to be primary and that it is in effect the entire time a driver’s app is on and he or she is available to accept or has a passenger. This creates a bright line rule that will help to ensure that commercial insurance exposure is not inappropriately shifted to personal auto insurance, as that could force premiums for all drivers to increase.”

The bills are now eligible to be sent to the governor.

Source: PCI

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