Taxi Liability in Boston

Most people try to avoid city driving – the crowded city streets, parking scarcity, and puzzling traffic signs can easily frustrate even the most experienced drivers. Taxi services ease that burden by taking you out of the driver’s seat and letting you enjoy the ride to your destination. But even taxis aren’t immune from accidents and many of Boston’s taxi companies have been under scrutiny for their management, regulation, and insurance issues. Recently, Mayor Menino announced a comprehensive review of the city’s taxi system.   Recommendations will take into account consumer complaints and the condition of cabs and suggest changes to improve the overall passenger experience.  One of the main issues is that the vast majority of the city’s 1,800 taxis are woefully under insured.  Most of the Boston taxi companies have insurance policies that meet the state’s minimum requirement for bodily injuries—$20,000 per person and $40,000 per accident. Still others  are self-insured and do not maintain outside insurance for liability. In these cases, their minimum coverage is usually insufficient compensation when someone is injured in or by a taxi cab.

Boston, like many other cities, uses a “medallion” system for taxi licensing. A special medallion is needed to operate a vehicle as a city taxi.   These medallions are a costly and rare commodity as they have not been issued for years.  They can’t be owned by individuals – medallions, when they were issued, were sold directly to taxi companies. This monopoly benefited the most profitable companies and enabled them to take steps to make personal injury claims against them difficult. Fleets are often subdivided into smaller companies with limited funding to create an extra barrier from the parent company.  Another method these companies use to protect themselves from lawsuits is to hire drivers as “independent contractors” who are not employees but simply using the company vehicle with their own insurance as protection.

So what can the riders do to protect themselves? The most immediate step passengers should take is to make sure that they have underinsurance motorist coverage through their own auto policies—and be sure the limit is an adequate amount to cover damages of an accident that causes serious injury. The small cost of covering yourself is worth the protection against the majority of underinsured vehicles in the Boston area.

With increased awareness that taxi cab companies are taking advantage of legal loopholes when it comes to passenger safety, the hope is that the Mayor’s review will set into motion changes that will increase protection of the public. In the meantime, understand the next time you hail a cab, you may not be fully covered if an accident occurs.

David McCormack has been a principal at Sugarman and Sugarman P.C. since 2011 after working as an associate since 2003. He represents claims involving serious injury in a broad range of civil practice. For more information visit www.sugarman.com.