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Risk Adviser
Pot, Pans and the Internet

With new innovations come new risks. Here are three emerging hazards that should be on the radar for insurers and their customers.
  • Alex Wells
  • November 2022

What do marijuana, nonstick frying pans and the latest and greatest wireless technology have in common? They can all lead to increased liability exposures for businesses and higher insurance costs.

General liability insurance typically protects individuals and businesses from legal damages brought on by claims involving bodily injuries and property damage that result from products, services or operations.

As such, liability insurance is subject to the whims of the U.S. legal system and evolving societal views. That's why, when we talk about emerging hazards, liability risks are always at the forefront.

Related: Crime, Professional Liability Present the Greatest Risks for Insurers of Cannabis Dispensaries

The widespread legalization of cannabis is just one of the emerging risks that is having an impact on general liability claims for insurers and their customers. Let's take a look at how legal “weed” and other trends are shaping the liability landscape.

High Stakes

Cannabis use for medical or recreational purposes is now legal in most states. And despite President Joe Biden’s presidential proclamation that pardoned all people convicted of simple marijuana possession under federal law, the manufacturing, possession, sale or use of marijuana remain—for the moment—federal crimes.The disparity between federal and state cannabis laws can cause issues regarding criminal liability in states where the sale and use of cannabis complies with state law but violates federal statutes. Insurers providing coverage to legal cannabis businesses may be on shaky legal ground if their customers are found to be in violation of stricter federal laws.

Legalized pot adds another layer of risk for auto insurers and businesses that operate fleets of vehicles. Police long ago developed tried-and-true methods to determine if a motorist was driving while intoxicated. But what about DWS (driving while stoned)? Both are risky activities that have led to an increased number of accidents. According to the National Highway Transportation Safety Administration, the percentage of fatally injured drivers who tested positive for drugs rose from 25% in 2007 to 42% in 2016, and marijuana presence doubled during that time.

The Stickiness of Nonstick

It is hard to imagine how prior generations prepared hot meals without nonstick cookware. The ingenuity of this innovation is impossible to ignore for anyone who has had to clean up after dinner. So there has to be a catch, right?

The man-made chemicals that make nonstick pans not stick are called per- and polyfluoroalkyl substances. They have been used in the United States since the 1940s, are persistent in the environment and can accumulate in living organisms. There is some evidence that these so-called “forever chemicals” can lead to adverse health effects.

It's not just in cookware. These chemicals have been detected in food packaged in PFAS-containing materials, commercial household products such as stain- and water-repellent fabrics, polishes and other common items. They are also present in worksites, especially production facilities and industrial settings. Thousands of lawsuits dealing with PFAS contamination have been filed in the last decade.

High-Speed Risk

Related: Need for Speed

Something as satisfying as faster wireless connection speeds hardly seems like a cause for concern—unless you have teenagers.

But concerns about the negative health impacts of 5G wireless networks have emerged from rumors and misinformation spread on social media—likely on the same high-speed networks blamed for the crisis.

It's not hard to draw parallels to the litigation associated with electromagnetic fields in the 1980s, specifically high-voltage overhead electrical lines. Despite conclusions that EMFs represent no measurable impact to human health, fears have persisted. Today, many believe that radiation emitted by 5G technology may cause cancer, perhaps even weakening the immune system.

So far, the evidence supports the idea that mobile phone technologies, including 5G, have no verifiable adverse health impacts. Still, many believe there are health risks associated with 5G. So when perception becomes reality, liability follows.

It might be tempting to dismiss the risks of marijuana, nonstick pans and fast internet as unnecessary griping. But the reality for businesses and their insurers is that with each emerging technology comes emerging risk.


Best’s Review contributor Alex Wells is head of U.S. Middle Market, Zurich North America. He can be reached at alex.wells@zurichna.com.



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