An Interview with David Kennedy, Esq., Product Development Manager, AIG

You can tell a technology is an important one when people begin to address the risks. Today, as humans and machines work more closely together than ever, the safety of collaborative robots, or cobots, is of vital concern for manufacturers, end users, insurers, lawyers, and lawmakers alike.

Cobots are clearly on the minds of forward thinkers who seek to manage and reduce risks. The law firm Littler Mendelson P.C. recently sponsored this Robotics Business Review webcast on cobots, safety, and liability.  In addition, the insurance credit ratings and information provider A.M. Best recently hosted this webinar on managing the risks of the shifting robotics industry.   

Lighter weight, more easily programmable, and more flexible and affordable than traditional industrial robots, cobots allow humans and machines to work alongside each other on complex tasks ranging from lifting and placement to assembly and packaging. For businesses, the benefits of cobots are already becoming clear. Cobots give human workers new tools to accomplish tasks more quickly, efficiently, and with greater insight than ever before. Especially for small and mid-sized businesses, cobots can generate rapid improvements in productivity and growth—and even make workers’ jobs safer and more engaging by automating dangerous, rote, or monotonous tasks.

Yet in working so closely with humans, cobots also represent potential hazards in the workplace. Robots can be large and move quickly, and they often wield dangerous tools. Malfunctioning wires and machinery in the cobot, a software error in the cobot’s program, or even an environmental condition like a slippery floor in a factory can lead to a robot causing serious injury to a worker. And with advances in artificial intelligence (AI), a self-learning robot on the job can learn things and act in ways the manufacturer and end-user may not have intended.

So who is responsible when using a cobot leads to a loss? To learn more about the liability issues involved in the rise of the cobot, we talked with David Kennedy, Product Development Manager for Robotics ShieldSM, AIG’s award-winningi, comprehensive risk management solution for the robotics industry.

Tell us about the current state of the robotics industry. What emerging trends do you see?

Robotics is a rapidly growing market. The global robotics industry in 2015 was a 28 billion dollar industry, and it’s expected to exceed 151 billion dollars by 2020, according to a report from the market intelligence firm Tractica.ii

Robotics is really the next major global innovation. It’s the next general purpose technology to forever transform the workplace. In the coming ten years, the impact of robotics on the way employers and employees operate and interact will be as great as, or greater than, the impact that the internet has had on the workplace in the last ten years.iii

Already, you have advanced robotics and AI systems being deployed across a variety of industries around the world. With the rapidly growing market and the rapidly evolving technologies comes the potential for a rapid expansion of new and emerging exposures.

While industrial robots have been around since the late 1950’s to early 1960’s, these robots have typically been confined to major manufacturing plants, and they have usually been behind cages—to protect human workers from these massive, automated industrial machines. But now, with these rapid advances in technologies and reduction in costs, with new algorithms and with the development of AI systems, you see smaller, more flexible, and more user-friendly robots: you see robots coming out of their cages. You see a huge growth of what people call cobots or collaborative robots.

Robots are working alongside humans in the workforce—on manufacturing floors, in hospitals, and more. When I talk about robotics, I use that term quite broadly. I not only include what you’d consider traditional robots, for example, industrial robots and these more recently developed cobots. I also include telepresence robots that can perform services remotely and even software platforms that can perform a task that’s previously been done by humans.

With the rapid growth in the robotic industries comes this growing risk: the grey area in coverages between traditional product and general liability insurance and professional errors and omissions insurance. What we have seen is the potential for product liability insurers and professional liability insurers to point the finger at each other at the time of the claim. The grey area in coverage can be eliminated by providing a streamlined solution for those robotics risks.

What are some of the new risks that are coming up in the robotics industry?

It’s an emerging area. There’s the potential for high-profile claims that may send robotics manufacturers, integrators, and end-users of robotics systems looking for more guidance and clarity in their risk management solutions and their insurance coverages. It’s critical for companies to consider and prepare for the legal challenges arising from robotics, AI, and automation. When a robot-related accident occurs, the potential for ambiguity is growing, and so is the potential for grey area.

For example, we’ve been talking about these cobots. The affordability and flexibility of cobots means they are especially suitable for small and medium-sized companies, the companies that make up the majority of the global manufacturing industry. These smaller companies may not have as much experience with robotics and may face new risks.

Historically, we’ve had large, industrial, automated robots—think production line robots in auto manufacturing. Now you can easily move these cobots around the workplace, and they can give rise to new employment liability issues. Especially as you introduce sensors and cognitive computing into these cobots, you may see the potential for OSHA, HIPAA issues, and privacy issues in the workplace.

With traditional industrial robots, you have a machine that’s been designed and manufactured primarily for one specific purpose, for one task only. But now, you have developers and programmers who can create programs for cobots and other robotic systems to make them perform different tasks. Couple that with AI and the ability of robots to sense and gather information around them, react to their environment, and act on their own, and the liability issues get greyer. Is it the manufacturer of the robot, vehicle, or cobot who’s liable? Or is it the software developer? Or is it some other component manufacturer that gets involved in those types of claims? So you can see how the liability landscape gets greyer along this path.

You’ve mentioned a grey area between professional liability and product liability. In the case of a cobot, ‘professional liability’ would mean that a human was responsible for the accident, whereas ‘product liability’ would mean that the manufacturer of the robot was responsible?

Yes, that’s actually a pretty precise breakdown of it. A professional liability claim would generally arise from an error made by the software programmer or the robotics services company, whereas a product liability claim would generally arise from a manufacturing problem with the robot.

So how do you determine who is responsible—or what is responsible—for a robotics risk?

That’s an excellent question. Applicable laws, regulations, and industry standards give some guidance. For example, the International Organization for Standardization (ISO) recently published their robotics industry guidelines, which specify safety requirements for collaborative industrial robot systems and the work environment.iv

Ultimately, however, the courts will have to parse this out. As is often the case with advanced technologies—frankly, drones are a great example—the law and regulations can be slow to keep up with the technology. You see legislators and governing authorities struggling with these issues about how to regulate emerging technologies and whom blame will be assigned to: whether it’s the manufacturer or the developer or the end user of these systems. It’s a complex question, and it will play itself out over the coming years.

And in the meantime, there is a rapid advance of those systems. For the first time ever, you may see non-industrial robotics—think drones, personal robots, enterprise workplace robots, and service robots—begin to overshadow the more traditional industrial robots in the next few years.v You may see a shifting landscape of risks and potential exposures.

Can you give an idea of some of the different types of robots on the rise today? You mentioned service robots. Are those robots that assist the elderly?

Yes, that’s one example of service robots. Japan is a leader in the space. In Japan, you’re already seeing a huge discrepancy between an aging population and low birth rates, and there is a growing need for service robotics and eldercare robotics. Japan is really on the cutting edge of developing technology like personal service robotics to help the elderly in their homes and with daily tasks and medications. These are incredibly relevant and timely technological advances for aging populations in Japan and, increasingly, for the U.S. as the Baby Boomer generation starts to retire.

In a similar vein, there are companies that are developing exoskeletons, a type of wearable robotics. You can use these types of robotics for the disabled and the elderly to help where there might not be nurses or medical personnel or relatives available. One extraordinary example is Marsi Bionics in Madrid, Spain. 17 million children worldwide are affected by neurological diseases that render them unable to walk and wheelchair bound. These children’s quality of life could be largely improved if walking could be repaired, restored, or rehabilitated. Marsi Bionics is working towards this goal by developing the world’s first child-exoskeleton robotic frame to help children as young as three stand and walk.

You said earlier that robotics is the next internet, in that it’s shifting relationships that humans have and the ways that we work. Why do you think robotics the next internet?

There’s a famous study published in 2013 which suggests that as many as 47% of jobs currently done by workers in the U.S. will be done by robotic machines and software within the next two decades. More recent studies estimate that less than 10% of jobs are at risk.vi So there likely isn’t going to be a 50% unemployment rate. But there is going to be a tremendous amount of technological change in the workplace.

I’m not just talking about a production line at an auto factory or highly rote administrative tasks. I’m talking about legal jobs, financial industry jobs, and other white collar jobs. Many traditional professional service industries will be dramatically transformed by robotics and automation in the next decade or two. And that’s why many suggest, including our colleagues at Littler Mendelson’s Robotics, AI, and Automation Industry Groupvii, whom we partnered with very closely in developing Robotics Shield SM, that robotics is the next innovation that will be as influential in changing the workplace as the internet itself.  

Think the steam engine. Think electricity. Think information technology and how great an impact those advances had on our society as a whole, and robotics can dwarf even those. It’s exciting to think about. Think about writing. Recently, a high-profile news agency has experimented with having algorithms automatically write news stories and articles about current events. It’s just fascinating to see some of the changes that can come about.

In my opinion, it reminds the workforce to stay adaptable and creative and continue to learn. You don’t want to stop learning. Creativity is future-proof. Creative occupations are less likely to be automated and replaced by technologies like robotics and machine learning. You have to keep developing your personal skill sets to stay marketable and stay ahead. It’s pretty fascinating!

    The content contained herein is intended for general informational purposes only. Companies and individuals should not solely rely on the information or suggestions provided in this article for the prevention or mitigation of the risks discussed herein.

     

    i  Esola, Louise. “2016 Innovation Awards: Lexington Insurance Co. Robotics Shield,” Business Insurance, 13 Mar. 2016. Web. 2 Aug. 2016. 

     

    ii  Tractica. “Global Robotics Industry to Surpass 151 Billion by 2020,” Tractica, 19 Nov. 2015. Web. 28 Jul. 2016. 

     

    iii  Mathiason, Garry et al., The Transformation of the Workplace Through Robotics, Artificial Intelligence, and Automation: Employment and Labor Law Issues, Solutions, and the Legislative and Regulatory Response. Littler Mendelson P.C., 2016. Web. 2 Aug. 2016. 

     

    iv  International Organization for Standardization. Robots and robotic devices – Collaborative robots. ISO/TS. 2016. Series Number 15066. Web. 2 Aug. 2016. 

     

    v  Tractica. “Global Robotics Industry to Surpass 151 Billion by 2020,” Tractica, 19 Nov. 2015. Web. 28 Jul. 2016. 

     

    vi  The Economist. “March of the machines: What history tells us about the future of artificial intelligence—and how society should respond,” The Economist, 25 Jun. 2016. Web. 1 Aug. 2016. 

     

    vii  “Robotics, Artificial Intelligence (AI) and Automation.” Littler Mendelson P.C. Web. 2 Aug. 2016. 

     

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