IoT Liability
In this article, we shall try to understand IoT liability. First, we will go over various topics like IoT liability and how it applies to IoT and then look at some significant IoT liabilities.
We will conclude by looking at experts’ opinions on IoT liability and then at the impacts of IoT liabilities. So buckle up, grab a coffee if you need it, and read till the end of the article for the best benefits!
What is IoT Liability?
First, what is the meaning of liability? According to the Oxford Dictionary, liability means “the state of being legally responsible for something”. As we all know, IoT is taking on the world at an exponential rate, and with the rise in IoT devices, liabilities are bound to occur.
The world of IoT is very diverse, and since it is still reasonably new, users and developers have yet to discover all the features of IoT. Furthermore, the liabilities of IoT, which include its devices, hardware, and software, affect the developers, the distributors, shareholders of the company, and the users.
Security is one of IoT’s most significant disadvantages, so more liabilities are bound to occur. For example, we have seen that when there is communication between devices via a network, the system is prone to DSoS attacks, which are harder to track with IoT devices.
IoT devices and other smart devices are created to make our lives easier, but what will happen if they go wrong? Well, there is no solid answer to this question, but when smart devices do not work correctly, it could lead to severe and irreversible mishaps in any industry.
For example, a smart connected car can cause a road accident or lead to a driver’s fatal death, drastically reducing the company’s reputation and millions of dollars in fines, let alone the loss of a precious life.
How Does Product Liability Apply to IoT?
It may sound a little dark, but the truth is that when a manufacturer creates products that could damage the lives of a consumer, the manufacturer is liable for creating harmful products. It is what is known as product liability.
Therefore, companies and manufacturers must be responsible enough to create products that ensure the consumer’s or buyer’s safety. In addition, there is a law that states a product should meet the basic and expected needs of the consumer.
Yup! There are laws for product liabilities that state the producer, the seller of parts, and the vendors are to be held responsible for selling damaged goods. However, the law is equal to all. So, the manufacturers don’t get all the consequences, as the user may also be liable for misusing or mishandling the product.
As of today, the future of product liability for IoT devices is not clear as there is no proper mechanism on who to hold responsible for security breaches, privacy issues, and other damages. There is also the question of insurance – will the insurance cover the costs of hacked devices or other damages from IoT devices?
What are the Major IoT Liabilities?
With the exponential growth of the IoT market, product liability increasingly affects software developers, end product users, customers, and consumers. However, consumers may be affected directly by damaged industrial IoT devices. Let us look at some significant IoT liabilities.
1. Device Malfunction
We know we can monitor, track and maintain our devices remotely through the user interface. However, any system failure or device breakdown may result in serious injuries. For example, a malfunctioning IoMT device can record wrong blood pressure levels and send the details to the doctor, which could seriously damage the patient’s health.
2. Data Theft
When you combine 2 wonderful yet vulnerable features of IoT: (1) – IoT devices connect to the internet online, and (2) – IoT devices gather and store information in the cloud, there is a lot of chance for leaking private and sensitive information. Cybercriminals take advantage of these 2 features and obtain such data and even expose them.
3. Cybersecurity
Most IoT devices are similar; DDoS attacks often use infected devices, and one hijacked device can provide access to other web servers and networks. Due to such complex environments of IoT, this issue worsens as it is challenging to recognize the entry point to stop further loss.
Legal experts’ opinion on IoT product liability
Legal experts believe that the damage in digital terms may transform the product liability for IoT devices as courts may ask IoT users to provide valid proof against third parties. As a result, IoT makers and developers may be held directly accountable for liabilities without solid evidence.
Also, there can be the kind of IoT attacks where various criminal and civil liabilities may be involved. An example is when a connected car crashes into another vehicle due to incompatible smart city traffic. In such cases, criminal laws could be applicable.
What is the Impact of IoT Product Liability?
IoT always does not collect accurate data, and if a company makes decisions based on the accuracy of the data, then the organisation is liable for errors. This is because the data collected by the IoT systems may or may not be factually correct, and the accuracy of the data impacts businesses heavily. It is not only the company that is liable; it affects the following members, too:
1. Manufacturers
2. Producer of parts
3. Assembling organisation
4. Installer
5. Vendors selling the product
6. Developers
7. Users/consumers
8. The company as a whole
Summary
You have now learned What IoT Liability is, how product liability applies to IoT, the major IoT liabilities, and what legal experts have to say. We finally concluded the article by looking at the people and organisations that are impacted by IoT product liability.