Frequently asked questions

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, freelancers, or other self-employed workers. 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 self employed 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.


What is a premium?

The insurance premium is the cost of the insurance. It's what you pay at the start of the policy, and it is shown to you as part of the insurance quote to help you to decide whether or not to buy the policy.


What is an excess?

When you take out an insurance policy you agree to pay an excess in the event of a claim. The excess is the amount of money that you will need to pay yourself, while the insurance policy pays the rest. Quite often you can choose the excess level but you need to make sure that you will be able to afford the excess if you need to claim.

For example, say you have Contents insurance with an excess of £250, and some office equipment valued at £1,500 is damaged. If you make a claim, the insurance will pay out £1,250, since that is the value of the goods minus the excess amount.