By Barbara Soderlin

Colorado in June became the first state to pass legislation authorizing ridesharing services such as Lyft and Uber, which the state calls “transportation network companies.”

Gov. John Hickenlooper said: “Rules designed to protect consumers should not burden businesses with unnecessary red tape or stifle competition by creating barriers to entry,” the Denver Post reported.

Insurance was the biggest issue of concern in Colorado, as elsewhere, because of the question of which insurer — the driver’s personal carrier or the company’s — should be responsible in case of an accident, and when coverage begins. Personal car insurance policies don’t cover drivers who use their cars for a commercial purpose.

Colorado’s bill requires the companies to carry a minimum of $1 million of commercial liability insurance covering drivers from the time they accept a ride to the time the passenger exits the vehicle. Starting in January, the company or driver must carry primary insurance with minimum coverage levels while the driver is soliciting fares.

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Image by AP Photo/Jeff Chiu via Next City