Insurance & Prop-22

On March 13th 2023 - A California state appeals court revived the ballot measure “Prop 22” that has been in court hearings since the vote in 2020. Below we’ll dig into what is Prop 22, the insurance requirements that affect you, and how Citadel can help you manage risks affected by the recent court rulings.

Who does this apply to?

Prop 22 applies to Transportation Network Companies (TNC) and Delivery Network Companies (DNC). These companies have to obtain a permit from the state of California to be classified as such.

TNC: Transportation Network Companies (TNCs) provide prearranged transportation services for compensation using an online-enabled application or platform (such as smart phone apps) to connect drivers using their personal vehicles with passengers.

DNC: a business entity that maintains an internet website or mobile application used to facilitate delivery services for the sale of local products

What is it?

Prop 22, in simple terms, made it legal to classify app-based drivers as independent contractors and provided a framework of benefits and protections for those drivers. TNC/DNC companies must provide:

·         Earnings guarantee of at least 120% of minimum wage while on the job

·         $0.30 / Engaged Mile for expenses

·         Healthcare stipend

·         Discrimination and sexual harassment protection

·         Auto accident and liability insurance

·         Occupational Accident Insurance and accidental death insurance

·         Conduct criminal background checks on drivers; and

·         Make sure drivers log off the app for at least six hours after they have been on for 12 cumulative hours in any 24-hour period.

Learn more about the insurance requirements here.

Citadel can help!

Citadel recently hired Ryne Ring, our in-house expert on occupational accident and ‘gig’/sharing economy [including TNC/DNC] companies. If you have any questions about the requirements for these companies, reach out to him at ryner@citadelus.com. He has plenty of markets for both the occupational accident requirement as well as the auto liability requirements of Prop 22.