Background. Industries that use autonomous vehicles, machinery and systems are able to increase efficiency and decrease costs, and tech adoption is catching on in new sectors such as agriculture, mining and construction. The advantages are obvious. Not so top-of-mind are questions about liability. Who is responsible for defects, breakdowns, misuse, accidents and privacy breaches? What are the implications for intellectual property, marketing, warranties, data rights, cybersecurity and safety? What happens if technology that is integral to operations is discontinued? What risks are assumed by users of autonomous equipment as opposed to owners? Is software — which is licensed, not owned — covered by a general commercial liability policy?
Impact. Businesses that don't confirm they have adequate insurance coverage for different scenarios may be vulnerable. This also goes for insurance companies that fail to adequately quantify risk, allocate liability and price premiums, and equipment manufacturers and software developers that don't mitigate their exposure to claims from equipment owners and users.
Top tip. If you're a business owner, speak to your insurance broker to understand the limits of your liability policies and arrange for supplementary coverage if required, particularly for claims related to software licenses. When it comes to contract negotiation with equipment manufacturers and software companies, businesses should work closely with vendors and legal counsel to determine responsibilities, repercussions for breaches, and liability, particularly in the case of misuse by an end user or failure of the autonomous system.
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