NEW OPPORTUNITIES – AND NEW RISKS – IN AN ERA OF AUTONOMOUS VEHICLES
Autonomous, self-driving vehicles are the future of transportation. In addition to providing convenience, safety and cost-efficiency for passengers, these vehicles stand to completely transform the economic dynamics of the automotive industry. But while autonomous vehicles can lessen the costs of human error, they can also introduce new, potentially crippling technological risks. In turn, the rollout of these new vehicles – along with their concomitant risks – will require a significant revamp of the traditional functions of auto insurance and increase the role of other forms of insurance, such as product liability coverage, business interruption policies and cyber insurance options.
Many predict that vehicle automation will generate billions of dollars for automotive companies and spur a diversity of new entrants into the industry, including suppliers of new technologies, digital services and infrastructure developers. A number of states are grappling with how to regulate these vehicles and industry players, while some states, such as Florida, have attempted to reduce regulatory barriers in order to fuel innovation and development.
Pressing full-speed ahead, car manufacturing heavyweights are hopping on the automated bandwagon in a race to develop their networks of self-driving vehicles. Tesla founder Elon Musk recently unveiled his ‘Master Plan, Part Deux’, which involves the development of self-driving electric cars that can be added to the ‘Tesla shared fleet’ to be used by other passengers while owners are at work or on vacation. Likewise, GM reportedly plans to begin deploying automated Bolt hatchbacks in 2018 for a test programme with Lyft. Technology companies have also entered the fray. IBM, for example, recently introduced ‘Olli’, a 12-person autonomous bus, with plans to test an urban transportation network in Miami, Florida. The diverse industry investment signals that automation is expected to create numerous benefits for businesses and consumers: better safety, greater mobility, energy efficiency and cost savings.
Jul-Sep 2017 Issue
Hunton & Williams LLP