Surge in e-bike injuries exposes gaps in insurance cover

The increasing number of e-bikes on the UK’s streets has seen an accompanying rise in injuries, according to surgeons at a London hospital. This is not only placing a significant burden on stretched hospital resources, but leaves insurers facing complex risks, legal grey areas and gaps in coverage.

Over the past six months, surgeons at the Royal London Hospital in Whitechapel have seen 150 cases caused by e-bike accidents.

E-bikes are bikes fitted with a rechargeable battery and an electric motor, meaning they are generally heavier than normal bikes – and much more dangerous in collisions.

Currently, anyone aged 14 or over can legally ride an electric bike, with no requirements to have a licence or wear a helmet in place. E-bikes are restricted to a maximum power output of 250 watts and must cut out when they reach a speed of 15.5mph.

Compliant Electrically Assisted Pedal Cycles (EAPC) are treated like pedal cycles in regulations – with no registration, licence, Vehicle Excise Duty, or compulsory motor insurance required.

The issue of separating electric bicycles from more powerful electric motorcycles, in terms of vehicle classification, is a serious one for all insurers.

Alexandra Wyard, director of technical underwriting at Allianz UK, told Insurance Times: “E-bike usage has become common across the UK with them increasingly used by delivery riders, urban commuters seeking car alternatives and recreational users. But regulations around the usage of e-bikes and other forms of micro mobility are struggling to keep pace.”

“Accident data is severely fragmented and inadequate as no centralised reporting exists, which makes it difficult to understand the full extent of the risk associated with e-bikes.

“E-bike riders often do not have insurance and so victims of accidents involving e-bikes may struggle to recover damages from individuals without assets. There is also the risk that riders who cause accidents might face unlimited personal liability without insurance protection.”

Lack of cover

The lack of sufficient insurance coverage for e-bikes is a pressing issue. Many e-bike riders assume that their existing auto or homeowner’s insurance policies will cover them in the event of an accident.

However, this is rarely the case. Standard insurance policies may not extend to e-bikes, leaving riders vulnerable to significant financial liabilities.

Niall Edwards, partner at Kennedy’s, explained: “If the e-bike in question is a legal EAPC there is no Motor Insurers’ Bureau (MIB) backstop. In those circumstances, third party claims would lie against the rider personally and recovery may rely on any household or cycle third party cover, or may be realistically unrecoverable if the rider is impecunious. The position is then no different to where the tortfeasor is riding a standard bicycle.

“If the e-bike is non-compliant with the EAPC framework it would be treated as a motor vehicle – compulsory insurance should apply, but of course it would be unlikely to be insured as a motor vehicle. In such circumstances, a civil claim may be presented to the MIB under the Uninsured Drivers’ Agreement.

“However, the MIB may conceivably seek to avoid acceptance of such a claim if they can show the accident claim arose in part at least due to some other tortfeasor. For example, the manufacturer of the e-bike, if it failed, or some other road user partly at fault.”

Rules and regs

The ABI has called for much more stringent legislation for testing of e-bikes and is among the groups calling for a kite mark-type standard for e-bikes.

E-bike owners, for their part, may assume their bikes will be covered by their home contents insurance policy, but a typical policy is unlikely to cover the full value of an e-bike or its theft away from home – an increasingly common occurrence, given they are often worth thousands of pounds.

In the event of an accident, riders may face medical expenses, property damage claims and potential lawsuit, according to Marsh. Without proper insurance, these costs can quickly add up, leading to financial hardship.

Furthermore, the lack of insurance can also impact third parties involved in an accident, such as pedestrians or cyclists, who may seek compensation for their injuries.

An increased use of e-scooters and e-bikes has resulted in uninsured riders causing approximately £50 million in bodily injury costs annually, according to the MIB.

Regulations are slowly catching up with the risks that e-bikes present. A report published by the All-party Parliamentary Group for Cycling and Walking earlier this year urged that holding platforms be held responsible for illegal or unsafe e-bikes, scrappage schemes for dangerous courier bikes and simpler police powers to seize non-compliant machines.

In terms of product-safety enforcement, trade bodies, road safety bodies and the Bicycle Association are continuing to push for stricter Office for Product Safety and Standards (OPSS) battery guidelines, formal surveillance of conversion kits and chargers and targeted recalls.

Edwards added: “Any and all of the above may assist, but it seems to me that the focus is and should be on minimum safety standards – for the e-bikes, their lithium-ion batteries and the related chargers – market accreditation, some rehabilitation of e-bikes as a product and a considerable amount of self-regulation by the e-bikes market.”

There is also the question of how insurers can plug the current coverage gaps relating to e-bikes.

Edwards finished: “Currently, e-bikes and their associated batteries, if non-compliant with current regulations and safety standards, present a significant risk, so many insurers will seek to avoid first or third party cover in policies. However, particularly in the business and the delivery sector, policies are going to need to address the gap.

“In reality, most conventional motor insurance will not stretch to cover tortfeasor e-bikes, but motor insurers will need to carefully check existing policy wording to either exclude all cover or only cover by extension compliant EAPCs, leaving no grey areas.”