Scooting Into Liability

Electric scooter use is an emerging, fun trend in large and small cities across the country. They have become a popular method of transportation for students on college campuses, professionals in busy downtown areas, and everyone in between.

Companies such as Lime and Bird are expanding transportation options by offering a cheap and convenient alternative to short trips in a personal vehicle, or via a ride-sharing service. Scooter companies allow users to rent scooters from an app, which riders use to provide payment information, locate and select a scooter, and track their use. Individuals are paid by companies to collect and charge the batteries, then return the scooters to sidewalks and other areas for use.

Lay of the Land

Scooters have been popular across the country, but they are not always welcome. Reports of scooters being vandalized and damaged are increasing, including some being thrown in the ocean or even set on fire.

Additionally, there has been little-to-no guidance from the cities themselves. Though scooters are intended to clear congestion on roads, some cities are complaining that streets and sidewalks have become dangerous as a result of unpredictable or reckless use.

One concern involves the lack of designated drop-off areas. Scooters are often in the middle of sidewalks, in front of businesses, and otherwise in the path of pedestrians, creating an unanticipated nuisance for cities and business owners. The Detroit Free Press recently investigated “poor parking etiquette” of users in the city, documenting numerous scooters placed in the middle of walking paths and lying on the ground. A valet parking attendant in the city—whose job now includes rearranging scooters left in front of his building—reported that “[users] mainly leave [scooters] wherever they want, wherever they feel like putting them.” Other people have complained that the scooters are damaged or otherwise present an eyesore for pedestrians.

The City of Detroit Department of Public Works recently issued a “Memorandum of Interpretation” addressing user compliance with the Detroit City Code. The Lime user agreement requires users to stay off sidewalks; however, the city allows scooters so long as they present “a low risk of disturbance” to pedestrians, who maintain the right of way.

Cities such as Ann Arbor, Michigan and Columbus, Ohio have banned scooters from sidewalks. Milwaukee recently launched a pilot program that, in part, requires scooter companies to have at least one staff member stationed in the city to promptly address any concerns.

Claims Trends

With every new product, comes new problems, and scooters are no exception. In California alone, there were approximately 250 reported cases of scooter-related injuries between September 2017 and August 2018. In Fort Lauderdale, Florida, there have been 35 reported scooter-related injuries, including four cases involving serious trauma. The Detroit Free Press reported several incidents in Detroit, including a user who collided with a pedestrian in a busy area near a food truck, and another user who was thrown off a scooter when he hit a pothole in the road.

Most reported injuries are not attributable to any defect in the design of electric scooters. Rather, case studies have shown a general lack of adherence to traffic laws or warnings by the scooter companies, failure to wear helmets, or riders simply falling off scooters. Claimants are also reporting a lack of understanding regarding whether riders are supposed to be on the street or sidewalk.

So the question becomes, what are scooter companies required to warn against, if anything? Rides are purchased using an app, which requires users to accept the company’s terms of service, which contains various warnings. Warnings are also found on the scooters themselves.

Where does one turn for coverage if a claim is filed? Brad Markvart, a claims attorney with SECURA Insurance Companies, notes that while users typically look first to their personal auto insurance policy, they will not find coverage there. The ISO standard personal auto insurance policy excludes liability coverage for use of a vehicle with fewer than four wheels. Other exclusions applicable to scooters include use of public conveyance vehicles and property damage to rented property.

Markvart explains that a user would also not have coverage under a homeowners insurance policy. The standard ISO homeowners policy broad form excludes coverage for “motor vehicle” liability, which includes operation of a motor vehicle rented to others, or used to carry persons for a charge. The policy defines “motor vehicle” as “a self-propelled land or amphibious vehicle.” An electric scooter is indeed self-propelled. Therefore, there would be no coverage under the homeowners policy.

According to Markvart, users will most likely find coverage under a personal liability umbrella policy. The standard ISO personal liability umbrella insurance policy includes an exclusion for recreational motor vehicle liability, but that exclusion does not apply to any recreational motor vehicle the insured or family member does not own.

Right Approach

There are several takeaways for practitioners. It is important to consider available defenses in claims against manufacturers, such as waiver, assumption of risk, and open and obvious danger. Other causes of injury in these claims, including failure to adhere to applicable traffic laws or warnings, improper use, and failure to wear a helmet are also important considerations. Finally, it is critical to have an understanding of the applicable city ordinances, as they will likely change frequently as the popularity of scooters increases.

Special Thanks

The author participated in a panel discussion on electric scooter liability at the 2019 CLM Midwest Conference, and would like to thank her co-panelists for their help: Brad Markvart, claims attorney at SECURA Insurance Companies; John P. Loringer, partner at Wilson Elser Moskowitz Edelman & Dicker LLP in Milwaukee; and Kevin C. Breen, director of marine and automotive research at ESi.