Benefits of Insurance for Gig Workers
According to BLS data, “it's estimated that 36% of workers take part in the gig economy and 33% of companies extensively use gig workers.”
The word “gig” refers to the transient nature of the job itself.
Some of the examples of the Gig Economy:
Independent contractors and professionals
Temporary contract workers
You may have come across these terms in your day-to-day work culture. Hence, the gig economy is not a new phenomenon—freelancers have been around for a while. So have consultants, temps, and so on. The reason why the gig economy has been under scrutiny for the past couple of years is that technology has lowered barriers to entry so much that “gigs” have become easily accessible to an unprecedented number of people.
It has now turned into a trillion-dollar industry with millions of participants.
But what does it bring on to the insurance and insurtech table?
The global pressure to regulate the gig economy has created an opportunity for insurance and insurtech products that can address the needs of workers and the platform businesses that employ them.
According to a report by ASSOCHAM, India’s gig sector is expected to increase to US$455 billion at a CAGR of 17% by 2024 and has the potential to expand at least 2x the pre-pandemic estimates. In another estimate, India is likely to have 350 million gig jobs by 2025.
Traditional insurers have not been active in the gig market despite their popularity and vast loss of data. General liability, accident protection, and disability are standard products offered to employers in the commercial space. Though customized versions of these products are vital for the gig workforce, established players have not yet been able to serve the gig market on a scale.
But in contrast, InsurTech players are stepping ahead in providing the desired flexibility and customization. They are offering on-demand protection by the hour and the ability to choose limits at an affordable price to the gig workforce. To offer such benefits, they have relied on technology (predominantly AI) and external ecosystem partners.
Let’s have a look at some of its benefits:
Personal accident cover: Gig workers are especially prone to dangerous situations on the road. For someone who has to urgently deliver parcels on a bike, it is crucial to be covered for medical expenses, dental covers and also life. The point to also be noted is that in case of any unfortunate incidents like disabilities or loss of life, their families have to be indemnified and, in such cases, cover their dependents and children either through employee, spouse and child (ESC) or employee, spouse, child and parents (ESCP) covers are especially recommended.
Temporary disability/ incapacity: In case of an unfortunate event like an accident, a gig worker is incapacitated to work for a few months, they might find themselves in a difficult financial situation. Temporary incapacity covers are like a daily allowance that can cover them for a specific period of time.
Term life insurance: The ongoing pandemic has led to an increase in flexible employment as people are turning to gig or freelance work. With decreased job security, the safety net of a term life insurance policy can be extremely comforting and provide peace of mind. Although group life insurance hardly offers enough coverage for people with families or other dependents, it still provides some level of protection and is worth opting into.
Maternity benefits for gig workers: Maternity benefits shall be applicable to every shop or establishment in which ten (10) or more employees are employed, or were employed, on any day of the preceding twelve (12) months; and such other shops or establishments notified by the appropriate Government. These can be provided as long as the gig worker stays with the company.
Mental health covers for gig workers: The gig economy is vast and encompasses myriad types of work, from rideshare driving and various delivery services to content writing and consulting. As with any form of employment, there are various pros and cons of working in the gig economy. An unfortunate reality in today’s employment landscape is that worker health is typically a low priority. This is especially true for gig workers who tend to suffer from many mental health triggers like anxiety about consistent income, social isolation, inconsistent work schedules, and much more. Therefore, the following mental health covers can be beneficial to them.
Remember, though, simply engaging gig workers as part of the team and including them in communications, meetings, and events can help them to feel more appreciated and valued.
The growth in the gig economy may result in changes to tax laws to allow more flexibility in providing benefits in the future. For now, though, employers need to be aware of and adhere to the laws and rules that regulate what types of benefits they can provide and how they need to report those benefits.