Key Insurance Covers for the Gig Workforce Under Corporate Insurance

Enhancing insurance awareness and ensuring wider availability of affordable insurance cover can go a long way in making our workforce more robust and livelihoods secure. The gig economy in India has moved from being a marginal part of the labor force to being an integral part for companies engaged in logistics, mobility, home services, professional gigs, and e-commerce. However, the risks faced by gig workers vary substantially from those faced by full-time salaried workers. Yet, the benefit programs for gig workers, which are expected to expand to around 23.5 million by 2030, are substantially low.

Given that gig workers usually do not fall under an employee-employer arrangement, they are usually devoid of protection gap in terms of safety, health crises, disability, loss of livelihood, liability issues, family protection and even weather-induced challenges. For businesses relying heavily on delivery people, drivers, on-demand technicians, and other freelance professionals, corporate insurance can now be considered, both as a means of protecting gig workers and maintaining continuity in business operations.

Below are multiple corporate insurance policies that companies should look at, for protecting the gig workers.

Group Personal Accident Policy: As per a recent survey based study, nearly one in every four gig workers in India clock more than 70 hours each week. 57% report work hours exceeding 49 hours a week and around 27% meet with accidents. Thus, accident cover is of primary importance for gig workers in India, which can benefit riders, drivers, delivery partners, warehouse employees, and field force employees. Such policies cover personal accident, accidental death, permanent total and partial disability, along with weekly income cover or hospital cash cover based on policy design.

Group Health Insurance: Health insurance is again important for gig workers, specially for the riders working in extreme weather conditions in India, today. With El Nino impacting India this year, gig workers are working in temperature above 38 degree to 40 degree, which increases the risk of heat-related illness significantly. Many riders and delivery partners are now covered under an enhanced health insurance programme, which includes OPD coverage with reimbursement of up to ₹5,000, along with IPD (hospitalization) and day-care coverage of up to ₹1 lakh. Corporate linked health insurance policies can reduce hospitalization expenses and provide continuity in terms of employment.

Term Life Cover and Disability Cover: For households dependent on gig income, a death or disability of the primary earner can create an immediate financial crisis. A basic term life policy can provide a lump-sum payout that helps families meet living expenses, repay loans, continue children’s education, and avoid falling into debt. Disability insurance, on the other hand, can offer protection against loss of earning capacity caused by accidents or health-related disabilities.

Microinsurance and flexible low ticket covers: High premiums have been a significant barrier to gig workers for accessing insurance solutions. Low- ticket insurance provides protection for life, health, accident and disability, which can fit their irregular income patterns. This can be a great alternative for gig workers, who cannot afford traditional insurance premiums. Premiums can be as low as ₹1–₹2 per delivery or ride, or around ₹150–₹200 per month for accident and income-replacement protection.

Commercial Motor Insurance & Transit Insurance: For the mobility and delivery sectors, commercial motor insurance, third party liability insurance, and transit insurance become critical components. With additional accident and health insurance coverage, transportation-related insurance becomes a significant component, especially for the urban Indian market with regular exposure to road traffic and claims probability.

A major policy development was the formal recognition of gig workers within the Code on Social Security, 2020. This new model includes cover for accidents, health and maternity coverage, life and disability coverage, and pensions including portability through e Shram registration linked to Aadhaar. Importantly, the aggregators must pay into the Social Security Fund a contribution of 1 to 2 percent of their annual income from the sector (with some limits).

The discussion surrounding insurance for gig workers, goes beyond just regulations today. The discussion around risk management is expanding to include topics like parametric insurance, modularity and climate-linked risk transfer as well as affordable, portable and fast products. Gig workers are a significant part for India economy today and are contributing towards the economic development of the country. Hence, insurance is significant for gig workers and the insurance products need to be more  portable, low-friction and should be able to provide adequate insurance for the new risks emerging in the Indian economy like extreme weather, income uncertainty, and vehicular coverage.

BY: Udaya Kumar Sr. Vice President- Underwriting & Placements, Alliance Insurance Brokers