EMERGING &
DISRUPTIVE TECH
In tandem with our cyber practice, KSW’s Emerging and Disruptive Technologies practice group, consisting of both cyber and professional liability attorneys, is continuously assessing technologies on the horizon, and their attendant impacts on the insurance industry/insured business areas.
This includes blockchain technology, cryptocurrency, artificial intelligence/machine learning, quantum computing, biometrics, bioscience tech, and the ever-expanding world of data privacy law and legislation. Our team members have developed competencies in these emerging areas, inter alia, by completing certificate programs from world-renowned universities and staying abreast of day-to-day developments via a variety of sources, including industry literature, blogs, and podcasts.
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In addition to handling claims and drafting policy wordings in these areas, our team has been writing and presenting on these topics in the U.S., London, and Bermuda markets.
BLOCKCHAIN, SMART CONTRACTS
& WEB3 TECHNOLOGIES
KSW’s emerging technologies team has been deeply involved in the areas of blockchain and smart contract technology since 2017, including understanding the cryptography and ledger essentials underlying the technology, how information is secured, stored and transferred on a blockchain, the different types of blockchain networks utilized for the public, enterprise or private uses, and the risks, benefits and use cases for smart contracts. KSW attorneys are familiar with how on-chain transactions are accomplished, the legal risks inherent in the use of blockchain tech and smart contracts, and how these technologies are being used to transform various professions, as well as the financial and insurance industries
Crucial to the appropriate resolution of a cyber-related claim is a timely and efficient analysis of the specific problem involved and the identification of appropriate experts necessary to respond to a policyholder’s cyber issues. Partnering with expert attorneys and other service providers is key to the overall effort to control exposures and efficiently and economically resolve these matters. KSW’s practice also involves the drafting of cyber-specific insurance policies and endorsements.
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KSW has worked with insurers drafting policy wordings for various types of insurance (e.g., cyber, management liability, tech E&O) for blockchain industry companies, crafting endorsements and exclusions addressing specific blockchain issues (e.g., initial coin offerings or yield-bearing accounts) and helping devise questions to be utilized in the underwriting process. KSW also works with insurers assessing coverage for reported claims and circumstances, including examining on-chain transactions as part of our coverage investigations. In our capacity as counsel to insurers, we also engage with Insureds and defense or breach counsel to assess regulatory, liability, and damages issues and, where relevant, advise insurers on litigation strategy issues.
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As the internet moves into the world of Web3 and a decentralized internet, we continue to monitor the risks inherent in that change. This includes the shift away from centralized marketplaces, toward new classes of products and services, the emergence of micropayments – and the practical and financial pitfalls inherent in the brave new Web3 world.
CRYPTOCURRENCY & NFTs
KSW’s Emerging Tech team has a specific focus on cryptocurrency and NFTs, including their uses for transactions, store of value, and as consideration for smart contracts. We have a deep understanding of the uses and risks of exchanges, hot and cold storage/ wallets, private key information, and multi-sig authentication. We also closely follow macro-economic trends and monetary theory, which informs our understanding of the overall state of the economy and how that impacts bitcoin and ether, and the risks inherent in leverage, yield-bearing accounts, and crypto investments. We are also well-versed in the pros, cons, and use cases for stablecoins, including algorithmically based stablecoinsKSW’s Emerging Tech team has a specific focus on cryptocurrency and NFTs, including their uses for transactions, store of value, and as consideration for smart contracts. We have a deep understanding of the uses and risks of exchanges, hot and cold storage/ wallets, private key information, and multi-sig authentication. We also closely follow macro-economic trends and monetary theory, which informs our understanding of the overall state of the economy and how that impacts bitcoin and ether, and the risks inherent in leverage, yield-bearing accounts, and crypto investments. We are also well-versed in the pros, cons, and use cases for stablecoins, including algorithmically based stablecoins.
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We closely track global developments in digital asset legislation and regulation and have a depth of knowledge and insights on the exposures crypto-industry businesses face to numerous U.S.-based regulatory schemes and authorities, including the SEC, CFTC, FinCen, and the IRS. During the past few years, we have been involved in investigating and assessing coverage for some of the most high-profile incidents and exposures in the cryptocurrency world.
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From our first crypto kitties presentation to the now ever-expanding world of non-fungible tokens (NFTs) and Bitcoin ordinals, KSW has a broad understanding of the media, intellectual property, and cyber and crime exposures inherent in NFTs. KSW advises Insurers on the risks inherent in this technology, as well as on crafting policy wordings, endorsements, and key underwriting information needed to properly assess and price NFT exposures.
ARTIFICIAL INTELLIGENCE
KSW's emerging technologies team has been immersed in the artificial intelligence ("AI") and machine learning fields since early 2019, including studying specifically via coursework at Massachusetts Institute of Technology's Sloan School of Management regarding the implications that AI will have on businesses and business strategy. KSW's attorneys have a keen eye toward why we are seeing businesses employ AI with a greater frequency which is, in large part, due to the need to process the abundant and growing data relevant to a given business or sector. KSW's clients and their policyholders are seeking to employ AI due to its benefits: increases in customer service, efficiency, quicker decision-making, and general boosts to productivity. At the same time, KSW's attorneys are following the issues that such automation and mass data processing via AI may be creating within a given business or sector.
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KSW's attorneys are particularly interested in the issues surrounding bias in AI and how that bias may lead to claims or other risk management issues. KSW has worked with insurers in drafting policy wordings and endorsements to encompass timely AI issues (e.g., EPL, Technology E&O, Cyber, Media Liability) and has also helped draft questions to be utilized in the AI underwriting process. KSW also works with insurers assessing coverage for reported claims and circumstances involving company usage of AI. In our capacity as counsel to insurers, we are also able to review with Insureds as well as their counsel those AI systems employed and at issue and to advise on relevant AI risk mitigation strategies.
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ROBOTICS
KSW’s Emerging Tech team’s robotics experience pulls from our transactional, M&A, and media/ intellectual property practices, and also includes a robotics instructor, with a deep knowledge of robot anatomy, sensors, and the coding involved to make robots achieve certain tasks. Robotics are increasingly being used across a variety of industries, including agriculture, health care/ medical devices, logistics, manufacturing and inventory, entertainment, education, drones/ aerial filming, transportation, and financial technology. Our attorneys are available to advise insurers on the legal, business, and regulatory landscape unique to robotics, including proprietary concerns with the development of new devices, risks inherent in start-up businesses, considerations with regard to data storage/ retention practices, and navigating cybersecurity issues.
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BIOTECHNOLOGY & BIOMETRICS
KSW’s emerging technologies team understands the unique insurance risks and legal challenges that arise in the rapidly evolving fields of biotech and biometrics. We closely follow developments in biotech as they pertain to these risks, including as they impact IP rights, cybersecurity and privacy issues, and regulatory compliance. In the biotech field, this includes CRISPR (gene editing), cryogenics, cloning, medical devices and implants, and microchip technology. We are available to assist insurers with policy wordings, endorsements, or underwriting materials specific to these technologies.
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Our team also closely follows developments with regard to the use of biometric data, particularly under the Illinois Biometric Privacy Act (“BIPA”) and other similar laws. We regularly advise clients on the legal landscape surrounding the collection, storage, use, and protection of biometric data, and the coverage implications for violations of biometric regulatory schemes. We work closely with insurers to develop wordings and endorsements that specifically address coverage for biometric privacy and statutory violations.
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QUANTUM COMPUTING
Emerging Tech team follows the leaps in quantum computing technology (pun intended), particularly as it impacts advances in encryption, blockchain technology and artificial intelligence/ machine learning. Quantum computers are able to perform mathematical calculations that are essentially impossible for normal computers (or even supercomputers) to perform, and quantum chips can process massive amounts of data simultaneously.
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We closely monitor developments and investments in this space by technology companies, research institutions and VC funds, and assess how quantum computing technologies impact risk to our clients, including in intellectual property protection, licensing agreements, regulatory compliance, data privacy, and cybersecurity.
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ADAPTIVE TECHNOLOGIES
Adaptive technologies include devices, software or systems that assist individuals with special needs in performing tasks, accessing information, or interacting with their environment. Adaptive technology can address physical, sensory, cognitive, or developmental impairments, and present a variety of risk factors that may be addressed by or impact insurance coverage, including personalization/ access to private health care data, internet-connected devices (e.g., text-to-speech software, mind-mapping software, alternative input devices) that are subject to cybersecurity concerns, IP and licensing concerns for developers and users of adaptive technologies, regulatory compliance and products liability concerns. Our experience in adaptive technologies allows us to advise insurers on these risks, as well as guide industry participants through joint ventures, strategic partnerships, and mergers and acquisitions transactions.
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INTERNET OF THINGS
At the same time, the Internet of Things (IoT) makes our lives more convenient, and the risks inherent in that accessibility are significant. The IoT is constantly gathering information from our devices, apps, sensors, connectivity infrastructure, and software and transmitting that data via the internet to other devices, central systems, databases, programs, etc. where it can be processed, analyzed, and used to generate insights or trigger a response. As a result, the IoT presents various legal risks including data privacy, storage, retention and security, cybersecurity and shift regulatory compliance obligations, data ownership and control, product liability, and IP. The IoT also presents a myriad of third-party risks, due to the numerous collaborative relationships among device manufacturers, software developers, cloud developers, and others. KSW’s Emerging Tech team, drawing on our transactional, cyber and media experience, regularly handles claims on behalf of insurers involving these issues, and advises on the impacts to traditional and emerging product lines, including with respect to underwriting, policy wordings, and endorsements.
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GAMING & E-SPORTS
While videogame law was once viewed solely within the ambit of media law, videogames including E-Gaming, applications, E-Sports, and other online gaming now presents liability beyond the media sphere and reach into the emerging tech, blockchain, NFT, Web3, digital currency, and other spheres. KSW's traditional media team and emerging technologies team work closely together on gaming issues to go beyond the Intellectual Property concerns and to cover all bases.
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KSW is also well-versed in the specific advertising issues inherent in current gaming and the fact that they can present not only media law issues but also regulatory issues. Further, KSW's traditional cyber team, emerging technologies and media teams bring their expertise to the area of gaming when it comes to privacy and data security. Particularly where companies are facilitating the addition of User Generated Content (UGC) to a particular game.
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KSW advises Insurers on the risks inherent in this technology, as well as on crafting policy wordings, endorsements, and key underwriting information needed to properly assess Gaming and E-Sport exposures.
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VIRTUAL, AUGMENTED &
EXTENDED REALITY
The world of Virtual Reality has been outside the reach of widespread adoption for years, but in the wake of the Covid-19 pandemic, increasingly common remote work or play scenarios and recent reductions in costs of VR headsets and other hardware have brought the benefits – and risks – of VR, Augmented Reality (AR) and Extended Reality (XR) technology to the forefront.
While these technologies have gained significant attention and adoption across industries, offering new ways to engage users to improve training and education, enhance visualization, and transform the way we interact with digital content and the physical world, they bring a whole host of legal risks that impact insurance for VR/ AR/ XR companies. Some of the key legal risks associated with VR/ AR/ XR technology include IP infringement, regulatory compliance including privacy and data protection, physical injuries, false advertising, virtual property rights, user-generated content, security and cyber security risks. KSW’s deep experience in insurance involving media and advertising liability, cyber security and data protection, first party liability and emerging risks make our team uniquely suited to advise industry participants on risk mitigation strategies, underwriting considerations, policy wordings and claims management and evaluation involving VR/ AR/ XR risks.​.