Connecting everyday physical objects to the Internet is changing the way we live and do business. But our legal regimes of civil liability, which were not developed with IoT in mind, have yet to be properly tested. The coming year is as good a year as any for that to happen, as intelligent devices continue to experience ever-broader adoption.

The challenge for the courts is to determine who is responsible for intelligent devices when things go wrong, as compatibility issues become more commonplace between technologies, leading to more devices in an interconnected world exposed to growing security challenges.

Until now, the courts have shown interest in IoT devices only insofar as the information they contain can be used as evidence. Last year an applicant tried to rely on his Fitbit wrist device to establish he suffered from sleep deprivation.

In the absence of new legislative provisions, the general liability paradigm will continue to apply, but the complexity of determining the real source of liability may expose new actors (manufacturers, but also software developers, maintenance engineers, etc...). For the insurance industry, there is a major challenge in effectively keeping up with emerging risks when it comes to assessing the liability risks that can stem from the use of IoT technology. On the other hand, insurers can access consumer data more readily to assess risk, manage claims and price policies.

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