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Liability in the Age of Driverless Cars

As companies such as Google, Volvo, and Tesla begin to ramp up their production of self-driving vehicles, the legal community braces for an influx of litigation concerning a variety of issues, including data privacy and copyright disputes.  There is one issue, however, which will be of particular and immediate interest to insurers across the country: Who will be held liable in the event of an accident involving a driverless car, and how will this affect the auto insurance industry?

According to Department of Labor statistics, of the more than 35,000 motor vehicle accident-related fatalities reported in 2015, over 90% of those accidents were at least partially attributable to human error.1   Self-driving car manufacturers claim that the vast majority of such fatalities are avoidable if the human element is removed from automobile operation.

Traditionally, litigation concerning motor vehicle accidents has primarily centered on theories of negligence – i.e. the reasonableness of a driver’s actions in relation to an accident.  We can anticipate that the connection between human error and car accidents will become murky with the implementation of driver aids such as software-assisted parallel parking, and even more so when full vehicular autonomy is achieved.  At that point we can expect developments in the law concerning product liability.

According to the “crashworthiness doctrine” established by Larsen v. General Motors2 and its progeny, car manufacturers have a duty of reasonable care to design their products in a way that will minimize the effects of a collision.  Product liability law encompasses causes of action asserted due to defects in both manufacture and design, as well as from failure to warn of the risks associated with a given product. 

With human intervention no longer a factor in automobile operation, the question of driver negligence could become obsolete. The vast majority of states with statutes pertaining to self-driving cars currently require that drivers capable of taking control of vehicles maintain a presence in the driver’s seat of such vehicles.1  However, Florida has passed legislation that allows autonomous vehicles to take to the roads without a driver behind the wheel.4  So how will all of this affect the insurance landscape?

Some driverless car manufacturers, such as Volvo, have claimed that they will accept “full responsibility” for accidents involving their vehicles, while other producers, such as Tesla, have indicated that they are not willing to do so.5  Ultimately, decisions regarding culpability will be determined by the courts who decide the cases which will inevitably be brought by plaintiffs who suffer bodily injury or property damage and initiate litigation. 

What is clear is that autonomous car manufacturers, and their insurers, can expect an influx of product liability suits once their newest technology hits the consumer market.  Accordingly, while individual auto liability policies will remain a necessary function of the driverless car ownership experience for the foreseeable future, insurers should expect to see an increase in demand from manufacturers for commercial policies with product liability coverage tailored to embrace autonomous vehicle claims.


1 See https://www-fars.nhtsa.dot.gov/Main/index.aspx; https://www.nhtsa.gov/press-releases/nhtsa-data-shows-traffic-deaths-77-percent-2015.
2 Larsen v. General Motors Corp., 391 F.2d 391, (8th Cir. 1968).
3 See, e.g. Cal. Veh. Code § 38750; Nev. Admin. Code § 482A.130. (In addition to existing state requirements that drivers maintain automobile liability coverage, Cal. Veh. Code § 38750(b)(3) requires that manufacturers obtain insurance or a surety bond in the amount of $5,000,000.00 prior to performing testing.)
4 Fla. Stat. § 316.85.
5 http://www.businessinsider.com/elon-musk-tesla-liable-driverless-car-crashes-2016-10.

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