How risk and liability will be determined in the connected cars landscape is an open-ended question for consumers and the insurance industry – with regulatory agencies arguing that software behind a self-driving car can be deemed the “driver”, the ultimate responsibility for accidents and liability is up for debate.
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The question about insurance is interesting. For the last 10 years, the world of cyber insurance has been really evolving. What that means is that corporations and companies that are interesting in really risk allocating in terms of cyber security have been purchasing – and the insurance carriers and insurance companies have been offering – these kinds of products.
Now, shift that and apply that to the connected cars landscape. It becomes even more complicated.
The liability of who or what company or what third-party is going to be responsible in the case of, let’s say traffic accidents or in the case of self-driving cars, there has been a lot of debate: Is that the manufacturer or is that the software? I mean, in terms of looking at how the liability plays out and really where the risk is going to be. That is an open-ended question currently.
N.H.T.S.A., which is the National Highway Traffic Safety Administration, has said that Google – when they are building a self-driving car – that the software behind the self-driving car can be deemed the “driver”.
So that is really interesting, because a “driver” now can be a non-human being. It can be the software behind the self-driving car. So, the question about basically making the driver responsible for accidents and liability questions – that is no longer true.
In the world of self-driving cars and connected cars where a lot of the liability questions really can be shifted to the manufacturers and to the software makers, the insurance companies are also reacting to that.
Now, what we are hearing is that because these vehicles are safer, that there will be less need for insurance because there will be less accidents and the insurance cost really should be going down because the risk is lower. Now, it is way too early to tell how it’s going to play out and how it’s going to impact the insurance market. What we do know that that there will be an impact on the insurance market