An article in our Plugged In tech and life sciences series

By Mitchell Foster II, Chief Underwriting Officer for Technology and Life Sciences

Exoskeleton technology – wearable devices that enhance physical capabilities and reduce strain – is expanding rapidly beyond its initial niche applications. Due to this recent demand, one report projects the global exoskeleton market to almost triple in value – to $1.25 billion – by 2030.*

Yet as adoption accelerates, so do the associated risks. For insurance agents, this represents a strategic opportunity, as organizations across technology and life sciences turn to agents to understand their evolving exposures and ensure they have coverage tailored to their high-growth, innovative operations.
 

Leveraging technology to reduce injury risk

Manufacturing, logistics and construction businesses have started using exoskeleton technology to reduce repetitive motion injuries and improve worker ergonomics. These devices are often used in environments where physical demands and injury rates are often high.

Beyond physical support, exoskeletons are seeing increased use as diagnostic tools. With embedded sensors and AI, they can monitor movement patterns to detect early signs of strain or injury and reduce workplace injuries through proactive intervention.

While the potential for reducing workers’ compensation claims is considerable, so too is the risk of malfunctions, improper calibration or software errors which can result in physical harm, triggering liability claims. Additionally, the use of monitoring data introduces privacy and ethical considerations that need to be addressed as adoption expands.
 

Elevated patient care – and privacy concerns

In healthcare settings, exoskeletons are used to support rehabilitation, reduce caregiver fatigue and restore a measure of independence to individuals with limited mobility. This includes devices used to assist patients with neuromuscular conditions or spinal cord injury in regaining a broader range of movement. For example, a patient with Parkinson's may use an exoskeletal arm to lift utensils and eat independently.

This usage presents risk on two fronts: mechanical failure or misuse leading to injury, as well as concerns of privacy and cyber risk related to the integration of patient data into digital healthcare systems.

Aligning coverage with exposures

One of the more nuanced challenges in insuring companies that develop exoskeleton technology lies in the end use. There may be times where a business develops the technology and it is used across different industries, making it more of a hybrid risk that crosses from technology to life sciences or even manufacturing. See the examples below:

This distinction affects not only underwriting but also regulatory compliance and product liability exposure. This is why agents must work closely with carriers who understand the intricacies of both sectors.

For example, tech-based errors and omissions (E&O) coverage is particularly relevant for firms integrating software and hardware. A robust tech E&O policy will include:

• Technology services liability – covering implementation errors
• Product performance coverage – for failures resulting in injury or financial loss
• Cyber liability – to protect against data breach and other cyber risks
• Intellectual property protection – to guard against infringement claims

For any company manufacturing exoskeleton technology, a comprehensive insurance plan should include product liability coverage to address claims stemming from design flaws, manufacturing defects and operational failures.
 

Supporting innovation with expertise

With the broadened use of this technology, it is increasingly important to partner with a carrier like The Hanover who understands the technology and life sciences industries, and can offer specialized solutions for these companies across both of these sectors.

Agents who understand both the opportunities and the potential risks of exoskeleton technology will be best equipped to advise clients and provide coverage that meets their needs today, and as they evolve in the future. 

About the author

Mitch has more than 20 years of experience in the insurance industry, specializing in technology and life sciences over the past decade. He has held various underwriting leadership roles throughout his career. In his current role, Mitch is responsible for The Hanover's national strategy and appetite for technology and life sciences.

*Source: Grand View Research