Automation Everywhere. But is it covered?
Do you remember a time when technology was an afterthought? When we didn’t have smart phones attached to our hips? When everything we interacted with wasn’t powered by technology and automation?
Many of us were born in a time making us older than companies like Google, Amazon, or Apple. These companies have become a part of our everyday life. As I type this, I look around my desk right and see at least one product that came from one of the above three companies; and products from many other companies that included automation in their processes.
Who would have thought ten years ago, or even five years ago, that automation would be taking over industries.
We have drones, autonomous cars, robots in factories controlled by software, autonomous vacuum cleaners, and even lawn mowers. With these advancements in everyday products, there is also an increased need to have proper insurance coverage in place for those products, the software, the automation processes, and their affiliated corporations.
To date, there are not many insurance companies that are players in this space without being large syndicates of Lloyds of London, or carrying large minimum premiums for something that can be simplified. This creates a market value for insurance brokers and carriers that specialize in this type of risk. It allows space in the market for growth and creativity.
Many estimate that in the coming years, the automation industry will be valued at close to $10 trillion and will continue to grow at a deafening pace.
These questions come to mind though…
- Can the insurance industry keep up with the growth and expansion of automation?
- Will there be enough insurance carriers in the marketplace that will allow a $10 trillion industry to have the proper coverages they need in all aspects of the businesses, at an affordable rate, where companies can enter this space and be profitable?
- Will insurance carriers see automation or robotics in a risk and automatically decline those risks for coverage, therefore pushing them into the harder-to-place marketplace?
- Will Lloyds of London syndicates, that might require higher minimum premiums with exclusions on policies, limit coverage for what the insured(s) might be doing?
These are questions that many have been looking into or are trying to find solutions for.
A couple new players in this market have been disrupters and have provided solutions. These insurance markets have created platforms to extend coverage for GL, Products Liability, Tech E&O, Cyber, Commercial Auto and BPP.
Opportunities
Sectors where we are seeing an increase in automation include Aerospace, Agriculture, Energy, Financial Services, Healthcare, Logistics, Manufacturing, Professional Services, Retail Trade via self-checkout, Robotics, Security, and Transportation. All businesses in these industries are affected by technology and automation and have a need to assess and protect the risks related to such.
To navigate the best options in coverage and protection, align yourself with a knowledgeable insurance brokerage team that can provide you with a multitude of coverage options, insights, and perspectives.
About the Author
Casey Kerns is a Healthcare, Miscellaneous Professional Liability and Cyber Liability broker for national wholesale insurance brokerage Founders Professional. Casey helps retail insurance agents place coverage for distressed healthcare, miscellaneous professional and cyber liability risks. Casey can be reached at [email protected].