While we still are yet to invent the flying cars that Back to the Future Part II predicted we would have by now - we’ve at least successfully unveiled a true self-lacing sneaker, the Nike Mag Air that doesn’t require visual effects. - But that’s just the beginning in this modern technological era. What science fiction films failed to account for is how advanced technology - particularly automated and “smart” technology - could potentially impact businesses, their operations, and their insurance.

The human brain now has some competition

Forbes states that technology automation is one of the pre-eminent trends in technology for 2017 - from self-driving cars to Siri to machine learning, technology is rapidly taking over tasks previously reserved for humans.  We’re in the ultra-marathon era of innovation; last year alone Google, IBM, and Amazon made new forays into using AI to bolster language translation, healthcare, and more. At the tail end of 2016, Apple joined the fray when it announced that it would begin publishing its own artificial intelligence papers and published its first one on December 22.

Elon Musk, who is no stranger to technology automation, recently announced that he would be backing the brain-computer interface Neuralink. This company is working to create devices that, rather than working alongside humans, can be implemented directly into the human brain to, as Musk stated in Dubai, enable “a closer merger of biological intelligence and digital intelligence.” He’s far from the only one looking to see how technology and humans can work together (rather than replacing humans with automation); Braintree’s Bryan Johnson is also in the process of developing a brain chip to improve brain functions and even alleviate the effects of neurodegenerative diseases.

Here’s the problem

The most glaring issue is the question of what technology automation will do to the existing job market. While innovative technology almost certainly means an increase in productivity, skill, and safety, it also has its downsides. A survey from Manpower Group has shown that approximately 45 percent of today’s job responsibilities could be automated in the next two years, and those working in sales, administration, and business operations could find themselves out of work. Don’t believe us, just look at San Francisco; just this year they launched the first U.S. location of Cafe X, a coffee shop staffed by robots, and it will likely expand throughout the United States in coming years.

Another issue that the inclusion of technology automation in the work force introduces is training; working with automation will require a new skillset from employees, and 60% of companies surveyed reported that they are currently investing in internal training to ensure that their employees’ knowledge remains up-to-date. When certain daily processes can be passed down to automation, supervisors will be able to communicate and interact with their employees more frequently and effectively.

With the increase in technology comes an increase in security risks. The VDC Research states that, cyber criminals have demonstrated adeptness at exploiting technological vulnerabilities, and with businesses increasing their technology, this creates greater cyber risks. In addition, to ease the transition from human-driven to technology-driven, employers should put a higher emphasis on cyber security measures.

Though technology automation comes with many benefits, many are still reluctant to trust robots over humans. In an experiment in 2015, researchers from The Wharton School asked MBA students to choose to trust either a human’s predictive ability (usually their own) or a statistical model with their earnings in an experiment. When they witnessed the model perform, the majority of students still chose to trust the human with their earnings, even though the model consistently outperformed humans by margins between 13 and 97 percent. Interestingly enough it was only after witnessing the model in action that many students chose to trust the human, in spite of the model’s strong performance. Many people today are still reluctant to place their trust in machines, and that could prove to be an issue as we move towards trusting machines with potentially dangerous functions such as driving, surgery, or rewiring our brains.

How humans can coexist with technology

Much of the response to technology automation is pure speculation, but it is important to have a keen eye on how technology is impacting business. If nearly half of the current workforce becomes outsourced to machines, companies will likely need to put a greater emphasis on cyber liability insurance. While many cyber liability policies cover losses resulting from businesses working with technology, there is no coverage for losses incurred by losses incurred by technology acting of its own (artificial) accord. If a robot acting of its own accord caused bodily injury or property damage, this would be another potential gap in coverage, as existing cyber liability policies do not cover property damage or bodily injury under any circumstances. Technical failure is another major issue to keep in mind: if work depends on robots and the robots malfunction, the resulting costs from business interruption could be devastating for the company, so we could see a huge jump in the importance of business interruption insurance.

It is also worth examining how an increase in technology automation would affect areas that deal with human error and human behavior. For instance, if automation does indeed lead to a surge of unemployment, there is a distinct possibility that current employees could sue for being replaced, which would impact employment practices liability (EPL) insurance. If employee lawsuits are challenging decision-making, directors and officers (D&O) insurance may counteract that. While an increase in technology automation would likely decrease workplace accidents and human negligence, the implementation of technology in the workplace does introduce unique risks, so workers’ compensation policies would need to take that into account.

Finally, it is imperative that companies provide training and education to acclimate their existing employees to the new technology to ensure that they understand how to work with it effectively.

As technology continues to advance, it is crucial that you remain adequately covered. Contact your HUB broker today to learn more about how to protect yourself and your business in this increasingly digital age.