Column: Risk Management

Retooling Reschooling

By: | May 2, 2017 • 3 min read
Joanna Makomaski is a specialist in innovative enterprise risk management methods and implementation techniques. She can be reached at [email protected]
Topics: ERM | May 2017 Issue

I fondly remember my high school home economics classes where we learned to cook, sew and do wood work. In fact, my high school years were on the cusp of the gender shift, when girls were finally allowed to join the boys in wood working classes.

We also had an elective class where we could learn to type using a typewriter — that crazy contraption that was thought only to be a fad and for which I saw little future use.

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I never did take the typing class.

Fast forward to today — how deeply I regret my naive, limited thinking and decision. How I wish I took those 8th grade typing classes. There isn’t an hour of any day when I am not hunting-and-pecking at a keyboard. How I still suffer.

It is clear the world around us is ever changing. How we do and make things, how we make money is changing — ever evolving. Tools are smarter, more connected, intuitive.

Like it or not, we have entered the high speed digital transformation highway and there is little room for a U-turn for any industry.

This is a transformation affecting all of our computing devices and tools — devices that connect to each other, talk, take directions from each other, and learn lessons, each exploiting the deep pool of data they collect and store. Technology research firm Gartner suggested that by 2020 there will be more than 26 billion connected devices globally.

This new technological paradigm takes advantage of rapidly growing internet connectivity and rich data. It is poised to drive out inefficiencies, optimize resources and (ideally) help workers do their jobs better and more safely.

Like it or not, we have entered the high speed digital transformation highway and there is little room for a U-turn for any industry.

Brilliant risk management capabilities such as personal protective clothing that is equipped with worker vital sign sensors have now been unlocked.

This sensor data empowers field, remote and centralized workers in real time, allowing critical information to be shared with support entities, including emergency responders if the worker experiences any health issues. This used to be equipment reserved only for science fiction movies or space exploration.

Even with this blunt reality unfolding before our eyes, very important people seem to be resisting change. Maybe out of pure politics or nostalgia for simpler times we see attempts to resurrect industries and jobs that are no longer viable.

Maybe some don’t realize that keeping dying jobs alive on life-support systems such as subsidies and incentives is simply unsustainable.

There is no question that this technology transformation can empower some workers; but it also threatens others. This can put at risk traditional roles, leaving workers behind.

Such a technological transformation cannot occur without a wholesale cultural transformation. Digitization is indeed a change of tools, but it is also a change of workplace models, hierarchical relationships, customer experiences, competitors and most importantly, mind-set.

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To be successful, culture change starts at the top. Leadership and a devoted implementation team are prerequisites to effectively move an organization to a more flexible, less hierarchical, more autonomous digital culture where employees can truly be creative. A workplace environment not to be feared, but revered.

Knowing this, getting early worker engagement, retraining and finding new ways to adapt existing skills should be much easier.

Just because the typewriters left the shop floor doesn’t mean you can’t adapt and develop digital skills such as using a digital speech interface to do all your typing. &

More from Risk & Insurance

More from Risk & Insurance

Robotics Risk

Rise of the Cobots

Collaborative robots, known as cobots, are rapidly expanding in the workforce due to their versatility. But they bring with them liability concerns.
By: | May 2, 2017 • 5 min read

When the Stanford Shopping Center in Palo Alto hired mobile collaborative robots to bolster security patrols, the goal was to improve costs and safety.

Once the autonomous robotic guards took up their beats — bedecked with alarms, motion sensors, live video streaming and forensics capabilities — no one imagined what would happen next.

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For some reason,  a cobots’ sensors didn’t pick up the movement of a toddler on the sidewalk who was trying to play with the 5-foot-tall, egg-shaped figure.

The 300-pound robot was programmed to stop for shoppers, but it knocked down the child and then ran over his feet while his parents helplessly watched.

Engaged to help, this cobot instead did harm, yet the use of cobots is growing rapidly.

Cobots are the fastest growing segment of the robotics industry, which is projected to hit $135.4 billion in 2019, according to tech research firm IDC.

“Robots are embedding themselves more and more into our lives every day,” said Morgan Kyte, a senior vice president at Marsh.

“Collaborative robots have taken the robotics industry by storm over the past several years,” said Bob Doyle, director of communications at the Robotic Industries Association (RIA).

When traditional robots joined the U.S. workforce in the 1960s, they were often assigned one specific task and put to work safely away from humans in a fenced area.

Today, they are rapidly being deployed in the automotive, plastics, electronics assembly, machine tooling and health care industries due to their ability to function in tandem with human co-workers.

More than 24,000 robots valued at $1.3 billion were ordered from North American companies last year, according to the RIA.

Cobots Rapidly Gain Popularity

Cobots are cheaper, more versatile and lighter, and often have a faster return on investment compared to traditional robots. Some cobots even employ artificial intelligence (AI) so they can adapt to their environment, learn new tasks and improve on their skills.

Bob Doyle, director of communications, Robotic Industry Association

Their software is simple to program, so companies don’t need a computer programmer, called a robotic integrator, to come on site to tweak duties. Most employees can learn how to program them.

While the introduction of cobots into the workplace can bring great productivity gains, it also introduces risk mitigation challenges.

“Where does the problem lie when accidents happen and which insurance covers it?” asked attorney Garry Mathiason, co-chair of the robotics, AI and automation industry group at the law firm Littler Mendelson PC in San Francisco.

“Cobots are still machines and things can go awry in many ways,” Marsh’s Kyte said.

“The robot can fail. A subcomponent can fail. It can draw the wrong conclusions.”

If something goes amiss, exposure may fall to many different parties:  the manufacturer of the cobot, the software developer and/or the purchaser of the cobot, to name a few.

Is it a product defect? Was it an issue in the base code or in the design? Was something done in the cobot’s training? Was it user error?

“Cobots are still machines and things can go awry in many ways.” — Morgan Kyte, senior vice president, Marsh

Is it a workers’ compensation case or a liability issue?

“If you get injured in the workplace, there’s no debate as to liability,” Mathiason said.

But if the employee attributes the injury to a poorly designed or programmed machine and sues the manufacturer of the equipment, that’s not limited by workers’ comp, he added.

Garry Mathiason, co-chair, robotics, AI and automation industry group, Littler Mendelson PC

In the case of a worker killed by a cobot in Grand Rapids, Mich., in 2015, the worker’s spouse filed suit against five of the companies responsible for manufacturing the machine.

“It’s going to be unique each time,” Kyte said.

“The issue that keeps me awake at night is that people are so impressed with what a cobot can do, and so they ask it to do a task that it wasn’t meant to perform,” Mathiason said.

Privacy is another consideration.

If the cobot records what is happening around it, takes pictures of its environment and the people in it, an employee or customer might claim a privacy violation.

A public sign disclosing the cobot’s ability to record video or take pictures may be a simple solution. And yet, it is often overlooked, Mathiason said.

Growing Pains in the Industry

There are going to be growing pains as the industry blossoms in advance of any legal and regulatory systems, Mathiason said.

He suggests companies take several mitigation steps before introducing cobots to the workplace.

First, conduct a safety audit that specifically covers robotics. Make sure to properly investigate the use of the technology and consider all options. Run a pilot program to test it out.

Most importantly, he said, assign someone in the organization to get up to speed on the technology and then continuously follow it for updates and new uses.

The Robotics Industry Association has been working with the government to set up safety standards. One employee can join a cobot member association to receive the latest information on regulations.

“I think there’s a lot of confusion about this technology and people see so many things that could go wrong,” Mathiason said.

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“But if you handle it properly with the safety audit, the robotics audit, and pay attention to what the standards are, it’s going to be the opposite; there will be fewer problems.

“And you might even see in your experience rating that you are going to [get] a better price to the policy,” he added.

Without forethought, coverage may slip through the cracks. General liability, E&O, business interruption, personal injury, cyber and privacy claims can all be involved.

AIG’s Lexington Insurance introduced an insurance product in 2015 to address the gray areas cobots and robots create. The coverage brings together general and products liability, robotics errors and omissions, and risk management services, all three of which are tailored for the robotics industry. Minimum premium is $25,000.

Insurers are using lessons learned from the creation of cyber liability policies and are applying it to robotics coverage, Kyte said.

“The robotics industry has been very safe for the last 30 years,” RIA’s Doyle said. “It really does have a good track record and we want that to continue.” &

Juliann Walsh is a staff writer at Risk & Insurance. She can be reached at [email protected]