Insurers urged to prepare for ‘metaverse’ liability

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    Most insurers are concerned about existing digital liability risks, but according to a Geneva Association (GA) survey of liability insurance professionals, an immersive virtual environment known as the “metaverse” The associated commercial liability risk could be faced in as little as three years. .

    “Our research shows that the most attention is on [of liability insurers] Our current focus is on relatively mature technologies such as cloud computing and AI, with significant potential for cumulative liability risks associated with this,” Geneva Association report March 2023. said.

    “But reinsurers also need to pay attention to earlier developments such as the Metaverse, which, while still highly uncertain, is developing rapidly and has far-reaching implications for liability. may bring about.

    “Understanding the liability landscape has become complex enough with the rise of social media and e-commerce platforms. Developing a fully immersive virtual environment will only add complexity.”

    Founded in 1973, GA is the only international association of insurance companies. A member insurance and reinsurance CEO surveyed his 54 executives on existing and future liability insurance trends.

    GA report, Forewarning: New Commercial Responsibility Trendsdefines the Metaverse as a digital ecosystem built with a wide variety of 3D technologies, real-time collaboration software, and blockchain-based decentralized financial tools. Within this environment, users create digital versions (avatars) of themselves and navigate virtual experiences that mimic real life.

    “The Metaverse does not currently exist,” said the GA report.

    “Nevertheless, if the metaverse develops as some predict, by 2026 Gartner predicts:[s] 25% of people spend at least 1 hour a day in the metaverse for work, shopping, education, social media, and/or entertainment.

    This report identifies three general areas of commercial liability risk associated with the metaverse.

    Data security and privacy

    “Metaverse users will face new privacy risks from the unauthorized transfer of personal and biometric data (facial expressions, gestures, etc.) to third parties,” the report states. increase. “Cybersecurity and data privacy breaches can also take more complex forms.”

    If the system is closed, that is, if it restricts participants to specific proprietary systems, then it is reasonable to expect responsibility accountability from the system owner. But in an open public forum with international reach, it becomes much more difficult to separate accountability for responsibility between platform owners and participants.

    property rights

    Unlike the real world, “ownership” in the Metaverse does not give anyone legally enforceable rights to physical property acquired through the use of virtual assets such as non-fungible tokens (NFTs). yeah.

    “This complicates issues related to potential copyright and trademark infringement,” notes the GA report. For example, someone who purchased her NFT from the original creator could sue for monetary loss because they thought the rights associated with acquiring the underlying assets were misleading.

    User interaction

    “When users interact via avatars, certain types of exchanges can occur that would amount to breaking the law if done in the real world,” the report said. “Such incidents may violate tort law (civil actions such as negligence, defamation, nuisance) or criminal law (including offenses and crimes such as assault, murder, robbery and rape). I have.

    “These avatar interactions create all sorts of legal uncertainty about who is ultimately responsible for virtual misconduct. For example, Metaverse users can wear tactile vests This allows you to actually feel the sensation if you touch it. [and therefore feel injured or assaulted through the interactions with their avatar, causing them to sue]”

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