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Driverless Cars Will Fuel Surge In Product Liability Coverage

According to Law360, a surge in demand for product liability insurance will become a trend as advances in autonomous car technology continues to increase. These autonomous cars are removing humans from the equation, resulting in liability for accidents being shifted away from the drivers and toward the manufacturers of driverless vehicles and their hardware and software systems.

Questions regarding who would be held liable in crashes involving self-driving cars arose after a fatal accident in May involving a Tesla Model S that was equipped with partially autonomous braking and steering features. Although Tesla did state that the Model S brakes were to blame for the crash, not the autopilot feature, this event continues to attract concern from regulators and consumers.

“Experts say that as autonomous cars become more sophisticated and require less human input, the manufacturers of self-driving vehicles and their components will face more liability for accidents while individual drivers will face less.”

Subsequently, personal auto insurance pricing is expected to decrease significantly due to the decline in driver liability, while auto manufacturers and suppliers will see an increase in price for their product liability coverage.

“The entire auto insurance industry may be radically changed,” Pillsbury Winthrop Shaw Pittman LLP partner Peter Gillon said. “Drivers are the real risks these days and not the cars. The more you take driver error out of the equation, the more you are looking at an auto insurance market based on safety system performance and product liability.”

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