Managing the supply chain will be vital in preventing risks associated with connected objects

Internet of things

Connected objects or the Internet of Things (IoT) is set to increase product liability risks for businesses.

Ahead of this morning’s session on connected risks, Francois Beaume, deputy group risk manager and insurance director at global quality control, inspection and certification company, Bureau Veritas, and the moderator of this session, warned that connected objects will have an effect on liability.

He explained that there are “several layers” in the supply chain: the Internet connection provider, the company who manages the connection, the firm who secures and protects the connection, and the company that is tasked with managing the data produced from IoT technologies.

For this reason, in an event of an accident, it can be unclear who liability lies with.

“If you are a connected car user and you have an accident, who will be liable: the driver, manufacturer, network provider or another party? In the IoT, there will be a chain of providers who could potentially be liable,” said Beaume.

Risks linked to IoT differ from object to object – a connected car has different risks to a 3D printer – but a common trend is that the risks are not necessarily linked to the object itself but are predominately found in the Internet connection.

Managing IoT risks are best done by going “back to basics” and performing a risk analysis, Beaume said.

“This will provide a clearer view of the risks that could be linked to a particular object in terms of frequency and impact. The analysis will also enable risk managers to identify what mitigation actions are needed and what actions could be taken in the future.”