As the world advances at a stratospheric pace, then insurance must do the same. Emerging technologies, with the potential to change the status quo, are bubbling away beneath the familiar surface of our landscape. Brokers are at the forefront of this issue and need to identify those technologies which are likely to break through and change the way that we conduct our lives and our businesses. The last few years have seen drones and UAVs emerge into our world with a wide range of applications including filming, surveillance, crop monitoring, search and rescue and carrying out military strikes. Drones have gone from a ‘pie in the sky’ theory to an everyday reality in a relatively short space of time and now brokers have clients who own and operate them and require insurance. Yutree are currently working on an exciting new insurance product for drones and UAVs. More to follow on this very soon.
Another emerging technology currently powering its way onto our roads is driverless cars. As liability specialists, Yutree are watching this space with interest. Here we bring you an overview of the potential impacts of driverless cars on liability insurance as we see them today
Cars do not tick many boxes today in terms of price, depreciation, efficiency, the environment and road deaths caused by cars. Driverless cars have the potential to address many of these failings. In the UK alone each year there are over 1,700 fatalities and 180,000 other injuries caused by motor accidents. An estimated 90% of road traffic collisions are caused by human error and only 2% by vehicle defects. Driverless cars could remove the human error element.
Autonomous vehicle technology has developed rapidly in the past few years with new systems being incorporated in vehicles such as:
- Autonomous Emergency Braking (AEB) – this has already been proven to lower the rate of low speed collisions that result in injury by 20%
- Lane departure warning systems
- Active cruise control
- Automated parking
Google’s redesigned Prius has driven more than 700,000 autonomous miles without an accident.
Increased profitability in the motor insurance market may be one welcome by-product of this emerging technology however, there will be new insurance considerations. As the control input transfers from human to computer it is likely that liability will follow. Liability could transfer to the manufacturer. This moves claims into the commercial arena and gives insurers a lot to consider. Accidents could now be caused by:
- Design mistakes
- Network outage
- Manufacturer defects
- Road maintenance
- Car misuse – including the potential for terrorists to gain control of vehicles for attacks
- Cyber attack
Our driving law will need to be, virtually, rewritten to accommodate a future including driverless cars (notwithstanding the changes required following the recent VNUK case in Europe Road Traffic Act vs Public Liability – Who is responsible?). Who will pay in the event of an accident? If the driver/owner is not controlling the car, can they be held liable? They are likely to point the finger at the manufacturer or network provider. In the event of a system failure, a manual override would need to occur. Is motor insurance still required in this instance? Who should decide the ethical programming of a driverless car? One thing is clear at this stage. Product liability insurers will be looking at this matter closely and cannot escape the fact that many of the new exposures are likely to end up at their door.