Legal Update: The attack of the dangerous toys

Perhaps it is just my neighbourhood, but I am constantly encountering people operating the very latest in dangerous toys, including flying drones, rolling hoverboards, speeding monowheels and lumbering Segways.

While this may just be part of the rich tapestry of modern life, we – the public, consumers and insurers – are missing the fact that these activities are not only dangerous, but illegal and uninsured.

Illegal? Yes. To operate a drone for commercial purposes – like selling drones to toy department customers – or in congested areas, like central London, you need permission from the Civil Aviation Authority, and the law requires adequate insurance. Hoverboards, monowheels and Segways can only be operated on private property. It is illegal to operate them on UK pavements or roads.

Dangerous? Absolutely. There have been many injuries caused by drones. Pop star Enrique Iglesias had his hand badly injured by a drone in May 2015. He needed surgery and was out of action for some time. Earlier this year, downhill skiing champion Marcel Hirscher narrowly missed injury or death when a large camera drone fell out of the sky during a race.

Numerous other injuries are being reported from all over the world, as are near-misses by drones flying too close to aircraft.

Potential dangers
The same goes for hoverboards. There have been many incidents where they have caught fire or exploded, including a horrific fire in Chicago where a family of five were killed when a hoverboard exploded, causing a blaze that burned their home to the ground. In North London, a 15-year-old boy was killed by a bus while riding a hoverboard.

However, many sellers are very coy about revealing the legal restrictions on use, or potential dangers of hoverboards.

What is clear is that there is a serious gap in the insurance market to cover the risks and liabilities that can arise from these gadgets.

There is manufacturers’ liability. Many of these items are being made in China and other overseas locations, but a number are being manufactured in Europe and the UK. By providing insurance cover to manufacturers, insurers would be in a position to influence safety standards to make these items safer to use and less likely to trigger product liability and insurance payouts.

Insurance is also needed by sellers. Insurers could insist that wholesalers and retailers provide better information about the legal limitations and potential dangers of these products. Insurance could also protect sellers in the event of claims for injuries incurred.

Buyers should have insurance policies against injuries suffered – by themselves or third parties – from use of these products. Injuries caused by illegal uses could be excluded. Such insurance is particularly important to commercial purchasers that use these products in their businesses, such as reporting, surveying, construction or agricultural work. Purchasers also need insurance protection from damage or theft.

Given the expanding number of injuries arising from these products, insurance companies might also consider whether there needs to be an insurance pool set up to compensate those injured by uninsured manufacturers, operators or sellers of these products. Perhaps this pool could be funded by a tax on sales?

There appears to be a whole new sector of the insurance market opening for placement of insurance to cover the risks and liabilities relating to these dangerous toys. Insurance companies should think seriously about how they want to write policies to cover the risks and open dialogues with manufacturers, sellers and purchasers through trade groups and relevant publications to provide and market this insurance coverage.