What is the sharing economy?
The sharing economy is an umbrella term that refers to short term renting or letting of assets, or provision of services by contractors or freelancers. Most sharing economy activity takes place via peer-to-peer websites, such as letting rooms on Airbnb, or giving rides via Uber, though it also includes the gig economy and more traditional on-demand services. The name "sharing economy" comes about from the concept that when someone engages in this activity they are sharing their assets or skills with other people. The sharing economy is predicted to grow an enormous amount over the coming years, until it becomes such an integral part of our lives that it will become indistinct from the regular economy.
Why does the sharing economy need insurance?
When people let their rooms or rent their assets, they are exposed to risk. The tenant or borrower may damage goods or property. There is also a risk that someone could injure themselves while in a rented room or using a borrowed item, in which case the owner could be at risk of being sued for medical expenses or damages. This risk is called liability. In addition, for short term freelancers or contractors, there is a danger that a dissatisfied client will sue because they think that the work wasn't good enough. Insurance that protects against this is called professional indemnity, and it covers the cost of any legal bills that arise as a result.