Autonomous vehicle coverage requires insurers to rethink classification of risks: Oxa's Marsden

By Henry Gale

June 18 - (The Insurer) - Insuring autonomous vehicle (AV) deployments has required insurers "to rethink the classification of risks", Rebecca Marsden from AV software company Oxa told The Insurer.

"The wordings we have with our insurers are bespoke and they're designed specifically with autonomy in mind, so contemplating full driver-out operation, and all of the impact that has across a number of lines of insurance, because it's not just motor," she added.

An all-risks policy for an AV initiative would encompass several lines of insurance, Marsden explained. "Defining risks in silos for autonomy doesn't really work."

As well as coverage for damage to the vehicle itself and legal liabilities from bodily injury and property damage, AV projects are also exposed to cyber, product liability, data and privacy, and regulation and compliance risks.

Policies also need to take into account the various stakeholders involved in the production, operation and usage of AVs, Marsden continued. A single AV deployment may involve a vehicle manufacturer, technology provider, fleet operator, fleet owner, local authority and maintenance service provider, for example, which could all be different entities.

"You have, at a bare minimum, three parties involved from an insurance perspective in each deployment, and the insurance needs to contemplate the interplay between those entities," she said.

This week, The Insurer is considering how the prospect of autonomous vehicles could change the motor insurance market. Read our recent articles on those already providing AV insurance and loss frequency and severity, and look out for our take on the impact on motor insurers tomorrow.