and Colorado; passed both houses
in Iowa and Tennessee; and been
signed into law in Kentucky, Utah
and Indiana. A similar bill was also
introduced in Alabama.
The bills’ language says all workers
who find jobs through a website
or mobile app are independent
contractors, as long as the company
running the digital platform does
not control schedules, prohibit them
from working elsewhere and meets
other criteria. Two bills exclude
transportation network companies such
These laws could have far-reaching
consequences. Traditional service
companies will struggle to compete
with start-ups paying minimal labor
costs. Opponents warn that the
Handy bills are so broad that a service
company need only launch an app
for customers to contract services,
and they’d be free to re-classify
their employees as independent
contractors — leaving workers without
social security, health insurance or
the protections of unemployment
insurance or workers’ comp.
That could destabilize social safety
nets as well as shrink available workers’
A NEW CLASSIFICATION
Independent contractors need to
buy their own insurance, including
workers’ compensation. But many
don’t, said Hart Brown, executive vice
president, COO, Firestorm. They
may not realize that in the case of an
accident, their personal car and health
insurance won’t engage, Brown said.
Workers’ compensation for gig
workers can be hard to find. Some
state-sponsored funds provide self-
employed contractors’ coverage.
Policies can be expensive though in
some high-risk occupations, such as
roofing, said Bollinger.
The gig system, where a worker does
several different jobs for several different
companies, breaks down without
portable benefits, said Brown. Portable
benefits would follow workers from one
workplace engagement to another.
What a portable benefits
program would look like is unclear,
he said, but some combination of
employers, independent contractors
and intermediaries (such as a digital
platform business or staffing agency)
would contribute to the program based
on a percentage of each transaction.
There is movement toward portable
benefits legislation. The Aspen
Institute proposed;portable benefits
where companies contribute to
workers’ benefits based on how much
an employee works for them. Uber
and SEI together proposed a portable
benefits bill to the Washington State
Senator Mark Warner (D. VA)
introduced the Portable Benefits for
Independent Workers Pilot Program
Act for the study of portable benefits, and
Congresswoman Suzan DelBene (D.
WA) introduced a House companion bill.
Meneghello is skeptical of portable
benefits as a long-term solution.
“They’re a good first step,” he said,
“but they paper over the problem. We
need a new category of workers.”
A portable benefits model would
open opportunities for the growing
Insurtech market. Brad Smith, CEO,
Intuit, estimates the gig economy to be
about 34 percent of the workforce in
2018, growing to 43 percent by 2020.
The insurance industry reinvented
itself from a risk transfer mechanism to
a risk management mechanism, Brown
said, and now it’s reinventing itself
again as risk educator to a new hybrid
SUSANNAH LEVINE writes about health
care, education and technology. She can be
reached at firstname.lastname@example.org. MICHELLE
KERR is associate editor at Risk & Insurance.
She can be reached at email@example.com. 888-222-4122 • PDNATIONAL.COM
Paul Davis National is the specialized commercial and large loss division of Paul Davis.
For over fifty years, Paul Davis has been a leader and innovator in the insurance
restoration industry and is widely recognized as a top provider of restoration services.
Paul Davis National is proud to serve commercial property clients with disaster planning
and recovery services throughout North America. No job is too large for Paul Davis
National, an insurance carrier-trusted source before, during, or following an event.
WATER • FIRE • MOLD • STORM