Automated Vehicles: Emerging risks and claims implications

The futuristic vision of self-driving cars is already a reality: driverless taxis are on the streets of cities in Arizona, California, and Texas. By the late 2020s, automated vehicles (AVs) are expected to be a common sight on roads worldwide, with manufacturers and tech companies racing to deploy advanced automated driving systems (ADS). While the technology promises convenience and efficiency, it also introduces complex challenges for insurers and claims professionals.

Regulatory Landscape: UK and US Perspectives

In the UK, the Automated Vehicles Act 2024 establishes a comprehensive framework for AV deployment and ongoing safety monitoring. The Act empowers the government to set detailed regulations covering pre-market approval and post-deployment compliance. A key element will be the statement of safety principles, requiring AVs to meet a standard equivalent to a “careful and competent human driver.” This benchmark will shape liability and claims handling when accidents occur.

The Act also introduces initial and ongoing authorisation requirements for ADS developers, reinforcing that safety compliance is not a one-time event but a continuous obligation throughout the vehicle’s lifecycle.

Across the Atlantic, regulation is fragmented and evolving. Several U.S. states, including California, Delaware, New York, and Washington, are considering laws mandating a human safety operator in autonomous commercial vehicles. These measures could significantly influence liability frameworks, as the presence (or absence) of a human operator determines whether claims fall under traditional negligence or product liability.

Claims Complexity: From Negligence to Product Liability

When accidents occur, liability shifts from the at-fault driver to manufacturers and component suppliers, triggering product liability claims rather than standard auto negligence. This shift implicates commercial liability policies with higher coverage limits, increasing exposure for insurers.

If legislation requires human oversight, claims may involve dual liability, negligence claims against the human operator and product liability claims against manufacturers. For claims professionals, this means more defendants, more policies, and more complex litigation strategies.

Litigation Trends: Lessons from Tesla Cases

Recent U.S. verdicts highlight the growing appetite for high-value product liability claims. In a landmark Florida case, a jury awarded $329 million USD in damages involving Tesla, citing overselling of Autopilot capabilities. Although the driver was found primarily at fault, Tesla bore 33% liability, underscoring the risk for manufacturers even when driver error is evident and was assessed punitive damages in the amount of $200 million USD.

Other cases, such as Justine Hsu v. Tesla and Micah Lee v. Tesla, show mixed outcomes but reinforce a trend: plaintiffs increasingly target manufacturers and technology providers, leveraging public concerns about AV safety. For insurers, this signals a shift toward defending complex, high-stakes product liability claims alongside traditional auto claims.

Key Takeaways for Claims Professionals

• Prepare for Multi-Policy Exposure: AV accidents may trigger auto, commercial, and product liability policies simultaneously.

• Monitor Regulatory Developments: UK and U.S. frameworks will shape liability standards and claims handling protocols.

• Anticipate Higher Claim Values: Product liability litigation often involves punitive damages and large settlements.
• Adapt Investigation Strategies: Understanding ADS functionality and compliance will be critical in determining fault and defending claims.