When hiring an electric scooter, the last thing you want is to be involved in an accident where you injure a third party. However, accidents can and do happen.

In Queensland, drivers of registered vehicles are covered by compulsory third party (CTP) insurance for liability for personal injury to third parties. For example, if the vehicle collides with a pedestrian, and the driver is at fault, the CTP insurance will cover the driver’s liability to the pedestrian.

However, as electric scooters are not registered vehicles, they are not covered by CTP insurance.

This raises the question of what, if any, legal protection do riders of electric scooters have for injuries they cause to third parties? The short answer seems to be “none”.

Insurance held by owners of electric scooters

If you have hired a scooter and there is an accident, which has caused damage or injured someone, the first port of call is to determine whether the owner of the electric scooter holds an insurance policy that covers the rider.

By way of example, in the case of Lime scooters, there is only one clause in the Lime User Agreement that refers to insurance. It says that Lime will hold “all necessary insurance associated with the [scooters] as required by applicable law”.

As the law does not require the owner or rider of the scooters to hold insurance, this clause does not require Lime to hold insurance.

Insurance under the rider’s home or contents insurance

Home or contents insurance policies usually include a legal and public liability insurance component.

This component is often thought of as providing coverage for injuries sustained by visitors to the home – for example, if a visitor was to slip over on a wet floor while at the home.

While that is the case, coverage extends further and includes a range of circumstances in which the policyholder may have a legal liability to a third party for personal injury or damage to property. For example, where a person is riding a bicycle and they crash into another person or a vehicle, this component will usually cover liability to the other person or vehicle owner.

However, while these policies might extend to the riding of bicycles, they don’t necessarily extend to the riding of electric scooters, as discussed further below.

Let’s review a few policies to see what is covered. Please note these were current at time of writing this article.

RACQ Home and Contents Insurance 

An example of this can be found in RACQ’s policy, which provides the following in respect of coverage for legal liability:

“Your legal liability and the legal liability of anyone who permanently lives with you at the home (except for a boarder or housemate) to pay compensation for loss or damage resulting from an accident that occurs in Australia and which causes: 

• death or injury
• loss of or damage to property

For example, if you are riding a bicycle and hit a jogger because you weren’t paying attention to the path in front of you, then you may be liable to pay them compensation for that accident.”

However, the devil is in the detail as the policy also contains the following exclusion:

“Using, owning or controlling a vehicle (except for a bicycle, golf buggy, wheelchair, or ride on mower or other garden appliance, which doesn’t need to be registered by law).”

It follows that if an electric scooter is considered to be a vehicle, liability arising from riding it is excluded from coverage under the policy.

The policy does not define “vehicle”, but in our view an electric scooter falls within the ordinary meaning of that word. As such, it seems that liability arising from riding an electric scooter would not be covered by RACQ’s policy.

Allianz Home and Contents Insurance

Allianz’s policy provides the following in respect of coverage for legal liability:

“We will cover your legal liability for payment of compensation relating to death, bodily injury or illness, and/or physical loss of or damage to property, which is caused by an accident (or series of accidents) attributable to one source or originating cause.”

However, the policy also contains the following exclusion:

“Claims arising out of your ownership, possession or use of any … mechanically propelled vehicle, except garden equipment, golf buggy or wheelchair which do not need to be registered or do not require statutory bodily injury cover to be taken out”.

It follows that if an electric scooter is considered to be a mechanically propelled vehicle, liability arising from riding it is excluded from coverage under the policy.

The term “mechanically propelled vehicle” is not defined in the policy, but in our view an electric scooter falls within the ordinary meaning of that word. As such, it seems that liability arising from riding an electric scooter would not be covered by Allianz’s policy.

AAMI Home and Contents Insurance

AAMI’s policy provides the following in respect of coverage for legal liability:

“We cover your legal liability to pay compensation for death or bodily injury to other people, or loss or damage to their property resulting from an incident which happens anywhere in Australia or New Zealand during the period of insurance which is unrelated to your ownership of the building or land at the insured address”.

However, the policy also contains the following exclusion:

“The use or ownership of a motor vehicle or motorcycle or instructing someone on how to use it unless at the time of the incident, it was being used legally and did not have to be insured under any compulsory third party insurance laws and was: 

• a remote controlled motor car;
• a wheelchair or a mobility scooter designed to accommodate physical disabilities or the elderly;
• a golf cart or buggy; and
• domestic gardening equipment (e.g. ride-on mower).”

It follows that if an electric scooter is considered to be a motor vehicle, liability arising from riding it is excluded from coverage under the policy.

The policy does not define “motor vehicle”, but in our view an electric scooter falls within the ordinary meaning of that word. As such, it seems that liability arising from riding an electric scooter would not be covered by AAMI’s policy.

Additional liability

But wait, there’s more – the rider might also be liable to the owner or local council.

Not only might a rider not be insured and have to pay any damages out of their own pocket, if the injured person sued the owner or local council, the rider may have to cover the owner’s or local council’s legal costs and any damages they pay.

This liability can arise because of indemnities (promises to protect against legal liability) given by the rider under the agreement with the scooter owner.

For example, in the case of Lime scooters, there are extensive indemnities contained in the Lime User Agreement – see for example clauses 1.4.7, 5.1 and 8.

If for example a person was riding a Lime scooter in Brisbane, they injured a pedestrian and were at fault, the pedestrian might seek damages from the rider, Lime and Brisbane City Council.

In that instance, Lime and Brisbane City Council may seek to rely on the indemnities in the Lime User Agreement so that the rider has to pay Lime’s and Brisbane City Council’s legal costs and any damages they pay to the injured person. 

How to protect yourself

What can riders of electric scooters do to protect themselves against legal liability for injury to third parties or damage to property?

Other than not riding the electric scooters at all, the starting point is to try and obtain appropriate insurance.

It may be that there is a public or legal liability component of a home or contents insurance policy that covers liability arising from riding an electric scooter. We have not considered all of the policies on the market – only the three noted above.

An insurer may also be willing to issue a personal liability policy that extends to cover legal liability arising out of riding an electric scooter.

However, while riders may be able to obtain insurance that covers their legal liability to an injured third party, they may be unlikely to obtain insurance that covers their liability to the owner or local council under any indemnities given.

That being said, owners or local councils may be reluctant to enforce an indemnity in light of the bad publicity that doing so may generate.

Furthermore, the rider may be able to argue that the indemnity is an unfair contract term under the Australian Consumer Law and obtain an injunction preventing the owner or local council from relying on the indemnity.

The simple solution, at least from the perspective of riders and injured persons, is for the government to extend the CTP insurance regime to cover electric scooters. This will give riders the protection of being covered by insurance and give victims the comfort that there will be a financial capacity to meet their claim.

We have seen calls for this to occur and we wait to see what, if any, action is taken. We will endeavour to keep you posted and can advise you on your legal rights if a claim is made against you as the rider of an electric scooter.