Who’s Liable in the Share Economy?

Byron M. G. Sanford, Esq.:

If these company’s lawyers didn’t warn them to watch out for this, then these guys need better lawyers! ;-) Seriously, though: “Who is liable if…” is always one of the most important questions that a company should be asking itself in every aspect of its business. Corollary to this question is “Am I insured for this, if I am liable?” The answer doesn’t always have to be “yes”, but you NEED to know when the answer is “no” and what it may mean to the continued viability of your business. This is basic risk-management. And it is every bit as applicable to disruptive start-ups as it is to stodgy blue-chip companies!

Originally posted on Gigaom:

This article first appeared on GigaOM Pro our premium subscription research service.

Updated: The tragic story, reported by The New York Times’s Ron Lieber last month, in which a man rented a car in Boston via peer-to-peer car sharing company RelayRides and wound up seriously injuring four people while losing his life, raised a familiar question for the share economy: Who’s responsible?

Addressing liability and security have become paramount issues as business models based on sharing items have emerged. Luxury peer-to-peer car sharing service HiGear abruptly shut down at the end of last year after a successful launch just four months previous. A criminal ring had stolen $300,000 in fancy cars and the HiGear founders felt they just couldn’t protect its users’ cars. And Airbnb’s lackluster response last summer to the trashing of two Airbnb hosts’ apartments highlighted how critical it is for people to feel safe before sharing their…

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