Filed Under:Risk Management, Loss Control

Risk on Autopilot?

Claims and Risk Implications of Driverless Cars

Editor's Note: This article was written by Kevin Quinley, principal of Quinley Risk Associates.

NFL quarterback Peyton Manning gushes about his OnStar system—and his Buick Verano—in a recent TV commercial. He calls audibles from the comfort of his car’s driver seat. Many consumers love what such systems can do to enhance the driving experience. To take it a step further, what if your car could drive itself

How do adjusters apportion liability? In this case, there will be a rise in product-liability actions from collisions. Allegations may arise that software failure occurred, proximately causing an accident. Of course, if one of the vehicles is driverless and the other has a human driver, lawsuits against flesh-and-blood drivers may still allege human error. However, the more prevalent driverless cars become, the more prominent product-liability actions may target car manufacturers and/or software-component manufacturers integrated into a car’s electronic system.

Murphy’s Law at Work
While it is tempting to think that everything will be safe and fine with software governing the operation of cars and trucks, Murphy’s Law always lurks. Software errors and malfunctions do occur. It is one thing if your desktop PC fails, though, and another to motor along I-40 at 60 miles per hour and have a software malfunction. The flesh and blood consequences are vastly different. In addition, subrogation opportunities will open against car manufacturers and/or software-component manufacturers. Again, such claims may become rooted in product liability.

Heightened Product-Liability Risks
Product-liability risks heighten with driverless cars. To be sure, they also exist in current vehicles—that is, lawsuits against Toyotas because of sudden acceleration, suits against car companies based on lack of crashworthiness, SUV tip-over instability suits from high centers of gravity, and so on. One can imagine electronics igniting and causing fires, or foresee product-liability claims by plaintiffs alleging software errors when a car collides with another vehicle, object or pedestrian.

In seeking deep pockets and financially responsible parties, plaintiffs would likely target car manufacturers and assert various theories of liability to get at them and software subcomponent makers. Cause and origin investigations would shift from controversies such as “Who had the green light?” or “Who ran the STOP sign?” to questions of whether a software glitch or collision avoidance system malfunction caused the mishap. 

A fallacy of “driverless” cars is that they are not strictly or purely driverless. A human being is still in the vehicle. Even the most advanced designs incorporate “fail safes,” letting occupants override and manually take over in cases of sudden occurrences. Nevertheless, disputes (and thus claims) will still arise regarding how quick the reflexes must be on the occupant’s part versus the type and timing of the vehicle’s response to the occurrence. 

Fewer Adjuster Jobs? 
Certainly one of the biggest niches in the insurance P&C claims industry is the legions of adjusters currently dedicated to handling automobile-liability claims. If driverless cars produce safer roads and fewer accidents, then there will be less need to employ as many claims adjusters. 

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