Technology is always advancing, and we all reap benefits from many seemingly futuristic ideas that are now reality. Some technology that has become commonplace recently is mind-blowing really.
For example, the impact of artificial intelligence (AI) is creeping its way into businesses who may have never before considered AI would matter to them. Drones are being used across all types of industries. Robotics are automating everything. Cars are driving themselves. Printing in 3-D has changed production in ways most of us never dreamed possible.
All of these technologies help improve efficiency, service, and safety (well, that may be debatable). However, their presence raises liability concerns too. Companies using popular advancements cannot ignore concerns that come with “shiny new toys.”
No matter what level of technology your business utilizes, we encourage you to work with an expert risk advisor at Peel & Holland, and do some planning for your technology risks. Here are some examples:
3-D printing is impacting processes and production across many industries. Think manufacturing and pharmaceuticals. The capabilities are yielding shorter product time-to-market, less expensive market entry, agile product development – all giving businesses a competitive edge.
On the down side, using 3-D printing could trigger risks stemming from worker injuries, property damage, and product liability. Also, cyber liability comes to mind, for design and data theft.
The degree of business liability risk will ultimately depend on what’s being produced, how deeply 3-D printing technology is involved in producing it, and what roles various parties have in the process.
Using drones is a game-changer for industries ranging from construction to warehousing. But deploying drones means you must stay abreast of a slew of compliance regulations, privacy guidelines, and safety practices – all of which are still developing.
Your ability to fly cameras over property lines, for example, brings the risk of privacy violations, including advertising liability if they capture certain images. Of course, liability risks also increase with the chance of operator error or flight accidents. This is just one more technology risk that could wind up causing property damage or bodily injury.
To protect against these types of risks, enhancements to commercial general liability policies or separate aviation policies can be a strong line of defense.
Self-driving technology is making big waves, and it’s altering the face of the automotive industry. With this come obvious risks affecting ride-sharing providers, company fleets, and trucking companies.
As your vehicles are equipped with autonomous features, your insurance needs will certainly change. The risks associated with this particular technology evolution raise complex questions when it comes to determining liability.
As of 2021, guidelines for assigning fault and determining roles in accidents involving such technology are yet to be determined in many cases. Government regulators are working to establish frameworks that will govern how automated vehicles will operate on public roads.
Planning for this technology risk will likely transform insurance policies in the long-term. Until then, you’ll need to consult with your Peel & Holland advisor as self-driving evolves.
Of note, a few auto makers have already pledged to accept liability for their future autonomous vehicles if the vehicle’s technology is responsible. More to come on that as this technology matures.
You may not have considered additional risks regarding the hardware and software needed to support self-driving technology. The need for liability protection against cyber theft, ransomware, hacking, and the misuse of company vehicle data will likely rise. Product liability is another area of increasing concern. Software glitches that cause a company’s self-driving vehicle to fail could produce yet another risk to mitigate.
Robotics technology is deployed across a wide range of industry sectors. From grocery stores to shipping warehouses, robots improve performance of all kinds of tasks. Impressive efficiencies, safety, and quality are the result. However, like other emerging technology use cases, we see the potential for claims involving property damage, financial loss, bodily injury, inequality, accessibility, and discrimination.
An expert Peel & Holland advisor can help you plan for less obvious robotics-related risks as well. Consider the number of companies using conversational chatbots (a form of robot) to help with IT tasks or to handle customer service. Even these robots come with risk. Using them could open your company up to compliance risks and accessibility issues.
Artificial intelligence (AI) is exploding as it optimizes and automates processes at an exponential rate. Because this technology’s reach is still believed to be in its infancy, the question of liability for errors, breaches, or malfunctions feels daunting.
AI is great if it results in improved outcomes, but its unique vulnerability can give rise to significant risks for organizations. Poor data could misguide critical decision-making. Businesses using AI could also unintentionally disclose protected consumer data. Worse yet, your company’s reputation could take a hit if unclear data results in a social backlash.
To address these liability protection gaps, companies using AI should consider enhancing insurance protections in the areas of cyber security, errors and omissions, business interruption, and indemnification.
Planning for the Future
Things change quickly for business owners. As your trusted partner, we need to know how you are currently or foresee using technological advances. We love seeing our clients grow from tech opportunities. But it’s our job to make you aware of exposures to new risks. To learn more about what may be driving your liability changes, please invite your Peel & Holland team to join your planning conversations.