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Meeting the Unique Insurance Needs of the Growing Gig Economy

Freelancers. Solo professionals. Independent contractors. Consultants. Whatever you call them, the trend toward a gig economy is growing. In fact, according to a recent survey conducted by Gallup,  an estimated third (36%) of all U.S. workers have some type of gig work arrangement. To put this number in perspective, that’s nearly 57 million Americans getting their side hustle on. With no sign of a slowdown, this shift presents both growth opportunities and challenges for insurers to better meet the unique insurance needs of gig economy workers.   

Gig Work: When Business Gets Personal

It used to be that a gig job was something you took when that’s all that was available – a temporary position until something more permanent came along. Today, the tables are turning, with more American workers electing to trade traditional employment to live a more independent lifestyle afforded by gig work. They’re also assuming more personal risk and therefore have unique insurance needs.  

Working as a solo professional may have its advantages, but there is a definite trade-off for the independence. The fact is, most of these workers are not eligible for workers’ compensation, unemployment, or short-term disability insurance, nor do they accrue sick time or receive vacation pay or paid personal days. This presents coverage needs for individuals and an opportunity for insurers who can provide products and services to help fill the gaps.

Meeting the Needs of Gig Workers

According to the Intuit Inc. and Emergent Research 2020 study, this new breed of entrepreneurs are typically unaware of their insurance needs as they relate to their businesses, leaving them uninsured or underinsured and exposed to liability risks. The unfortunate truth is that gig workers can be sued just as easily as large companies – even if they’re not at fault.

Today, forward-thinking insurers have an opportunity to provide independent workers with some of the support, services, and stability that typically come with full-time employment. But to deliver potential insurance solutions, companies need to know what it is that gig workers want, need, and how to deliver it. Key considerations should include:

Coverage Offerings that are Unique to Their Business

From dog walking and interior design to website hosting and virtual administrative assistants, the gig economy comprises a wide variety of industries, products, and services. In lieu of the one-policy-fits-all option, a custom-made policy that is based on the specific work performed and potential risk exposure is a better way to approach this demographic. Insurance companies that serve niche industries should consider ways to promote their level of expertise in a specific business and how they can best mitigate associated risks.  

Providing Specialized Customer Service

Gig workers typically wear a dozen or more hats. In addition to their specific work, they perform administrative and bookkeeping duties, launch new marketing plans, fix computer issues, etc. With only so many billable hours in the day, it’s critical for insurance companies to approach these individuals with a high level of customer service. From policy changes and billing to certificate requests, insurers need to make it easy for gig workers to get the streamlined service they need. Considerations for improving customer service can include a designated division or in-house agency representative to specifically manage and field insurance transactions and policy changes for gig businesses. In addition to having knowledgeable service people to handle incoming calls, it’s equally important to ensure that website requests and emails are also being monitored.

Flexible Policy Options

Along with flexibility in their daily operations, gig workers also want flexible insurance options. To most, this is an attractive benefit because it allows workers to get the coverage they need today and to easily make changes as their business begins to scale. Options can include:    

  • The ability to add policy riders and endorsements
  • Adjustable policy limits and coverages that can be increased or decreased as needed
  • Coverage options for individuals who work on a per-project basis and therefore need only usage-based insurance
  • Online options to easily and securely make premium payments

A few Words About Benefits

While this article is more focused on liability insurance, it's also important to address concerns surrounding health, life, and disability insurance for gig economy workers. Unfortunately, securing coverage independent of an employer continues to be a struggle. And while there is a call for benefits equality for everyone in every occupation, including a change in how benefits work, there remains a lot of work to be done.

Today, carriers and agents have an opportunity to evaluate, promote, and deliver real value to workers in the gig economy by understanding the need and offering coverage where they can. Which is why a good time to evaluate your digital capabilities is now. After all, gig workers are on-demand individuals. If you won’t meet their needs, chances are your competition will.

At One Inc, we proactively engage your policyholders in the digital channels they use the most. If you’re planning to move forward with new digital capabilities that will enhance your customers’ experiences throughout the payment and renewal process, give us a call.

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Chris Piwinski is a Product Marketing Manager at One Inc, focusing on “what’s now” and “what’s next” in insurance technology.

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