Taxi and ridesharing apps Uber and Lyft have announced the expansion of their insurance coverage as the companies work to respond to issues brought to light by a fatal accident on New Year's Eve involving an Uber driver.
The taxi and ridesharing startups will now provide liability coverage for drivers that are using the apps but don't have passengers in the vehicle.
See also: Uber Rolls Out 'Surge Drop' Feature for Cheaper Rides
The New Year's Eve accident occurred when the Uber driver was between fares but connected to the taxi and ridesharing app. The family of the 6 year-old girl that died has sued Uber for wrongful death.
Uber previously only covered the period from acceptance of a fare to its completion. Non-commercial drivers were required to have their own insurance that would cover them outside of this period. Lyft also expanded its insurance program on Thursday to also cover drivers between pickups but logged onto the app.
This arrangement created the possibility for a legal gap. Some personal insurance did not cover the periods when an Uber driver had the app open but was not on the way or actively engaged with a fare. Uber did not cover this period, either.
"In order to fully address any ambiguity or uncertainty around insurance coverage for ridesharing services, Uber is becoming the first and only company to have a policy in place that expands the insurance of ridesharing drivers to cover any potential 'insurance gap' for accidents that occur while drivers are not providing transportation service for hire but are logged onto the Uber network and available to accept a ride," Uber wrote in a blog post.
The insurance purchased by Uber will cover $50,000 per person in an incident, $100,000 for bodily injury and $25,000 for property damage.
"Over time, we fully expect that the personal insurance industry will develop additional products for ridesharing drivers," Uber wrote in the post. "But with this new coverage today, insurance companies and legislative bodies have the time to be thoughtful in how to embrace the innovation of ridesharing in cities across the country."
Lyft released a statement on Thursday night that addressed the insurance gap directly.
"Lyft’s liability policy was designed to cover the time when drivers have passengers in their cars, as well as the period when a driver is on the way to pick up a passenger," Lyft wrote in a press release.
"This new protection will provide backstop coverage to drivers when they are in match mode and are not providing rides," the statement added.
Uber also released an infographic to highlight the gap it believes the new insurance will cover.

Have something to add to this story? Share it in the comments.