Moving liability from conventional to autonomous vehicles will pose challenges for insurers warns IBC senior counsel

Published: September 29, 2017

Updated: July 24, 2018

Author: Luke Jones



Migrating liability from normal vehicles to fully autonomous vehicles (AV) will be a major challenge for risk managers in the future. Mario Fiorino, director, legal and senior counsel for the Insurance Bureau of Canada (IBC) offered the advice at the RIMS Canada Conference this week.

“Because roadside public authorities will be named repeatedly in these types of lawsuits, or the failure of infrastructure to have adapted in a manner that is foreseeable to the failures or interaction between autonomous vehicles and the infrastructure, and if there is a catastrophic injury that results, you are going to see municipalities and provinces named in that context in liability,” Fiorino suggested.

It is not a problem that will be visible immediately as fully autonomous vehicles are not expected for at least a decade. However, the auto insurance industry is being warned to plan ahead for the disruptive technology. Semi-autonomous vehicles are rolling out now and the level of autonomy will increase as development increases.

When there is a “period of intersection” between conventional and fully AVs, “the legal system is going to have to respond,” Fiorino offered while participating in the session, titled Managing Risk in a Connected Community: Technology, Innovation and Insurance. “There is going to have to be an approach that recognizes that product liability principles [that are] left on their own and are common law will not be able to sort these issues out,” he added.

In the meantime, hybrid vehicles and products will switch between personal and commercial lines, causing problems for insurance providers.

“Regardless of their advisors, agents, brokers, at least from a legal standpoint, the question remains: who has informed them that gravitating away from that original profile constitutes a material change that could have adverse consequences?” Fiorino asked.

“Courts will be concerned about that – the reasonable expectations of the insured and the quality of the consultation that they have received because no matter how quickly the landscape changes, what has not shifted up to this point is the professional duties of advisors and agents,” Fiorino told attendees. “That has remained static for a very long time.”