Driverless Tech Liability is All in the Wording

Designating autonomous vehicles as ‘drivers’ raises a variety of potential legal complications meaning self-driving cars will change how insurance companies price and sell policies.

Meanwhile, governments, courts, insurers and automakers are all weighing in on the attributes of autonomous vehicles, their ownership and uses. The central liability model currently underpinning auto insurance, which is based on individual driver liability, may soon change to reflect a greater emphasis on the liability of the manufacturer of an AV.

“It is important to establish responsibility and liability in order to insure autonomous vehicles adequately,” said Janet Ruiz, director of strategic communication for the Insurance Information Institute. She explained the commercial aspects and uses seem to indicate liability will possibly assign to the manufacturer and/or business, such as public transportation, trucking and taxis, depending on the risk structure and business type.

“The personal autonomous vehicles are still in early stages and are not fully autonomous,” Ruiz noted. “The liability issues tend to split between driver error and responsibility and malfunctions of the vehicle which are manufacturer error and responsibility.” From her perspective, the liability seems to be shifting to the manufacturers, and business owners in some cases. “Proper use of vehicles will still be a consideration, as well as training in businesses that offer AV transport. Public transportation such as trains have already paved the way but AV trucks and taxis will be breaking new ground,” Ruiz said.  “Personal AVs will need new definitions and boundaries for liability. We are seeing this in semi-AV in determining manufacturing errors versus user errors.”

For Sam Abuelsamid, a Guidehouse analyst specializing in autonomous vehicle technology, the questions regarding insurance liability are still far too cloudy, and with Level 3 autonomy capabilities set to enter the market soon, he thinks the discussion about insurance and liability needs to speed up. “Right now, liability is sort of an open question and nothing has really been settled yet. For anything below a L4 system, specifically L2 and below where the driver is still responsible for the vehicle, they have full liability for anything that happens,” he said. “When you get to L4 and a system is operating the vehicle that is designed without supervision or even a human on board, and at that point, whoever created the system has full liability.”

Conditional automation, such as Level 3, is where it gets a little fuzzy, he said, where the hands-off, eyes-off, brain-on paradigm means there are still situations where the driver is expected to take over control but, when the system is operational, the driver doesn’t have to pay full attention. “It’s not at all clear who has responsibility in that scenario and that’s something that needs to get settled quickly because those systems are coming onto the market, this year and next year,” he said.

Volvo’s mission, in fact, is to sidestep the twilight zone of Level 3 where the autonomous feature will request human involvement in certain situations. “No carmaker wants to be the test case that had the runaway robot car that killed ‘little Suzie’,” Gail Gottehrer, partner Akerman LLP, told TU-Automotive back in 2017. “So, by skipping Level 3 and guaranteeing they will not be litigating with individuals, it’s brilliant.”

For ADAS systems and features like blind spot monitoring and automatic cruise control insurers need to start testing whether or not that functionality reduces the risk of getting in a crash. “Insurance companies may have the option to reduce your risk premium, another aspect that is  also currently unclear, because there is no standard for testing and evaluating these systems,” said Abuelsamid. “It’s all kind of a mess, really.”  He added that there needs to be a regulatory policy decision made, that spells out that for L4 systems, the manufacturer is responsible. “Many carmakers have, if the vehicles they put out have an accident in AV mode, they will take responsibility for those crashes,” he said. “That needs to be codified into law, whether that is federal or state level.”

Another side of the liability issue rests with the naming of certain features, which carmakers use to sell the public on advanced technology but may include unclear terms and marketing jargon that mislead consumers and encourage them to misuse the technology. “We need to standardize the branding, not allowing manufacturers to come up with their own names but rather have a generic name for what the feature actually does, the way we do with anti-lock braking,” he said. “Take intelligent cruise control for example” What does that really mean?”

Abuelsamid said he’d like to see the Insurance Institute for Highway Safety (IIHS), a nonprofit organization funded by auto insurance companies, take a more active role in developing standards and testing for ADAS and autonomous driving features and platforms.

“I think they need to work closely with regulators to share the things they’ve learned and incorporate that into new rules and standards,” he said. “Insurance companies fund the IIHS, and they should expand those resources and expand on that testing. He noted that they have started down that path with tests on blind spot detection and automatic emergency braking but it needs to expand to test systems like Tesla’s AutoPilot and GM’s Super Cruise features.

Then, with a clear set of metrics and standards, the insurance industry will be better prepared to sort out issues of liability, claims and premiums – a discussion. “The evolution of insurance with automobiles is ongoing. The important benefit to society always comes from safer vehicles, roads, driving conditions and previously safer driving behaviors,” the III’s Ruiz said. “The goal in autonomous vehicles is partly to eliminate unsafe driving behavior.” She noted there are other considerations such as weather and road conditions that are difficult for humans and technology to navigate, and said the less risk, accidents and losses that will potentially evolve would benefit insurance and society generally.