Community Bicycle Programs - Bike Library -
Bicycle Sharing - Public Use Bicycles Issues:
Liability / Insurance

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If you have questions or expertise about community bike programs, please join the email-based Community Bike Forum.  There are rarely more than a couple message a week.  The discussion focuses on community bike, earn-a-bike, free bike, bike library, bike sharing and other forms of cooperative bicycle programs. It provides those new to the movement an opportunity to get information that will help them along and those with experience an opportunity to share their knowledge and further expand the movement.  To subscribe send an e-mail to community-bike-subscribe@egroups.com.   Please forward this information to others who might be interested.

Liability / Insurance Issues

One of the most often asked question about community bike programs is, "What about liability?"  Most programs simply post a sign, attach a sticker, or ask individual riders to sign a waiver that removes any responsibility from the City/operating organization.  The basic premise is "Use at your own risk".  Most seem to find that this is enough.  Similar approaches are used for other "risky" community services, such as community gyms etc.

Periodically new free bike program attempting to find full insurance coverage to cover all potential lawsuits.  Earlier research conducted by the Minneapolis/St. Paul Yellow Bike Coalition concluded that no insurance carrier will provide coverage for such a program.  There is always the chance that a new search with discover an underwriter, but we haven't heard of it yet.  Let us know if you do.

Source we have heard about for some kinds of insurance are the National Bicycle Dealers Association coverage from National Insurance Professionals Corp in Washington State, tel: 360-697-3611. You will need a local agent to write the coverage.  Insurance brokers who have reportedly helped community bike programs get insurance are:

Orion Insurance Group, Lynnwood, WA 98038.

Youth "earn-a-bike programs" have been more successful at get liability insurance.  It can costs about $250 per year.  In the policy, make sure you describe all of the activities you undertake, the shop, the people involved (volunteers, paid staff, kids, etc.) so that in the event of a claim, all of your activities are covered.

Some experts recommend that a free bike program should be operated as a separate entity, apart from the City and other programs, and having just enough assets to cover its operations.   The idea is that there would be nothing to lose in the event of a lawsuit.

Research into waivers and liability questions done in Toronto conclude with the following advice:

1. Waivers do very little except make people believe they can't sue you (when in fact they can).
2. The  lawyers advised to have a waiver anyway
3. Require users to take a helmet with the bikes (which we supply)
4. Indicate that the bikes shouldn't be used after dark, etc.
5. Get liability insurance -- several million dollars in liability coverage.  We don't know of any example of an accident occurring with a free-bike program, but  it's useful to cover your bases -- especially as many donors will be more comfortable after you had taken this steps.

Charlottesville's (VA) Free Bike Program is incorporating in the state of Virginia as a non-stock corporation, but has a non-profit organization 501(c3) fiscal sponsor to accept donations and handle administrative duties. They do not have any insurance but our only assets are the bikes.

Here are a few a few prudent steps most organization should be able to take:

1. Incorporated as a 501(c)(3) nonprofit.  Corporations provide a liability shield to their board and staff, though (at least under the laws of some states) this shield can be pierced in the case of ineptitude.
2. Get the Directors and Officers insurance.  It should only cost a couple of hundred dollars per year and many good people who have been around the block won't join your board unless you have it.  It will pay for attorneys to work on your case, and possibly pay a claim against you in the event of a suit.
3. Make a serious effort to ensure our bikes are safe, thus precluding liability passing through the organization to the board.
4. Have a membership system where folks join to ride.  At the point of joining they sign a waiver giving the organization some insulation from legal action.  The form should states that they will "hold harmless" the organization.
5. All bikes should have a "ride at your own risk" sticker.
6. Keep the organization close to broke.  Even if you are sued, what are they going to take?  Un-repaired bicycles?  Tools?
7. If your organization works with kids <at all> look into what kinds of background checks the government offers.  Find out how public school and soccer league volunteers get checked, as this is common in those organizations.  I would imagine every government does this work, and in Mass. any agency can apply to have checks performed on staff and volunteers if they can justify the need for the information (i.e. working in a classroom environment with kids).

Decatur Yellow Bikes recommends that organization protect themselves in the following ways:

1. Incorporated
2. Have no members
3. Posted "ride at your own risk, obey rules of the road, check bike operation for safety, use lights at night, helmet recommended" information on signs at the bike racks and on stickers on the bikes.
4. Posted phone number on bike to call for pick up or repairs.
5. Suggested that volunteers check their homeowner's or renters insurance policy for liability coverage when doing volunteer work for a nonprofit corp.
6. If you are working closely with a city, town or other government entity, they may be able to cover your members with a "rider" on their liability insurance.
7. Before bikes are put on the street have a volunteers complete a safety checklist and test ride.  It is a good idea to have two volunteers check a bike before releasing it.

Community Bike Programs Homepage

• Starting a Community Bike Program

• Tracking Bikes & Anti-theft Strategies

• Starting a Corporate or Government Bike Fleet

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