I was delivering on a pedal bike (non-electric). I hit a pedestrian who stepped into the bike lane. He sued me for $100,000 for a fractured hip. I sent the lawsuit to my Homeowners Insurance. They sent back a denial letter citing the “Business Pursuits” exclusion. I had to hire a lawyer for $300/hour out of my own pocket.
Key Takeaways
- Homeowners ≠ Business Insurance: Standard Home/Renters policies cover your personal liability (e.g., hitting someone while biking for fun), but explicitly exclude ANY business activity.
- The “Duty to Defend”: Liability insurance pays for your lawyer. If coverage is denied, you lose the free lawyer. Legal fees alone can bankrupt you.
- Personal Umbrella Policies: A standard Umbrella policy follows the underlying policy. If the Homeowners denies it, the Umbrella denies it too.
- The Solution: You need a specific “Courier” endorsement or a Commercial General Liability (CGL) policy for independent contractors.
The “Why”: The Business Pursuit Exclusion
The logic is simple: Commercial activity carries higher risk. A courier rides 50 miles a day in traffic; a recreational cyclist rides 5 miles on a Sunday path.
Your Homeowners policy is priced for the Sunday rider.
When you are paid to deliver, you are a business.
- Clause: “We do not cover bodily injury arising out of or in connection with a business engaged in by an insured.”
[IMAGE: Screenshot of a denial letter highlighting the “Business Pursuits” clause]
The Investigation: Finding a Lawyer-Payer
I looked for policies that provide “Legal Defense” for couriers.
1. Delivery App Insurance (GrubHub/UberEats)
- Bike Coverage: Varies wildly. Some provide $1M liability for cyclists (which includes a lawyer). Others provide $0.
- Action: You must verify this before you ride. If they provide it, they handle the lawsuit.
2. Specialized Cyclist Insurance (Velosurance / Markel)
- Coverage: Can include liability for business use if selected.
- Benefit: They provide the attorney to defend you.
3. Membership Associations
- Option: Groups like the “League of American Bicyclists” or freelance unions sometimes offer liability insurance products for members.
Comparison Table: Who Pays the Lawyer?
| Policy | Personal Ride Accident | Delivery Accident |
| Homeowners/Renters | Pays | Denies |
| Delivery App Policy | Denies | Pays (If applicable) |
| Commercial Gen. Liability | Pays | Pays |
| No Insurance | You Pay | You Pay |
Step-by-Step Action Plan
- Check the App’s Policy: Does your platform cover cyclists? If not, you are exposed.
- Buy Courier Liability: It costs ~$25/month. It is worth it just for the legal defense.
- Asset Protection: If you own a home, do not ride for an App without confirmed liability coverage. You are risking your equity.
FAQ
Can they take my house?
If you lose the lawsuit and don’t have insurance or cash to pay the judgment, yes, they can place a lien on your home or garnish your wages.
Does a Personal Umbrella cover this?
Only if you have a “Business Pursuits” endorsement on the Umbrella, which is rare for gig work. Standard Umbrellas will deny it.