Product liability ‘compulsory’ for motor insurance

The UK government will introduce legislation making product liability a compulsory part of motor insurance.

Speaking in Milton Keynes, the location of a major driverless car trial, roads minister Andrew Jones said insurance and insurers would need to adjust to accommodate the autonomous technology. A major consultation is taking place during the summer, but compulsory product liability is already on the to-do list.

However, it won’t be the only change for insurers as the government works towards its Modern Transport Bill.

Andrew said, ‘Firstly, much of the data on which insurance is priced and sold will steadily become obsolete. Secondly, vast quantities of new kinds of data will become available, assessing not individual driver risk but vehicle behaviour and other factors.

‘And thirdly, in the event of a serious collision when in driverless mode, it would be the vehicle at fault, instead of the human driver.

‘In the legislation we will propose, we want to create space for the industry to lead these changes. And we will amend the Road Traffic Act 1988 motor insurance provisions.

‘Compulsory motor insurance will be retained, but it will be extended to cover product liability, so that when a motorist has handed control to their vehicle, they can be reassured that their insurance will be there if anything goes wrong.

‘Where the vehicle is at fault then the insurer will be able to seek reimbursement from the manufacturer.

‘The vital point is that, for affected individuals, the insurance process will feel much the same. Motorists and victims of collisions won’t be forced to go to court to obtain compensation. They will have the benefit of fast and fair insurance compensation – just as they do today.’

Hands-free driving on certain sections of motorway is expected by 2018, with full autonomy on certain sections by 2021. Full door-to-door autonomy is expected in 2025.

The UK government is keen to introduce appropriate legislation to support this progress.