Workers’ compensation insurers are applauding wearable tech initiatives as a potential way to monitor and reduce workplace accidents and injuries. But some observers are asking, at what cost to privacy?

Wearable Tech & Workers' CompInsurance organization American International Group, Inc. (AIG) recently announced its strategic investment in tech startup Human Condition Safety (HCS). The firm, which is a spin-out of Human Condition Labs, develops wearable technology that incorporates artificial intelligence, building information modeling, and cloud computing to try to prevent workplace injuries before they happen. The New York-based company is targeting industries that hold the highest risk for workers, including heavy manufacturing, energy, warehousing and distribution, mining, transportation, and construction.

Because state laws require businesses to provide medical coverage, rehabilitation services and lost wages to injured employees through workers’ compensation programs, coverage for this area is one of the insurance industry’s largest product lines. By decreasing employee injuries and deaths through wearables, the industry believes it may be able to lower costs and increase profits for themselves and their clients, giving many employers incentive to test these products in their work environments.

But before concussion-detecting sensors in hard hats or fatigue-monitoring wristbands become a widespread reality for workers, the tipping point may be the issue of privacy. Experts in workers’ comp say companies must first investigate employment legalities and may need to negotiate with labor unions.

As a result, insurance defense law firms that serve as panel counsel for workers’ comp claims will want to pay close attention to emerging technology trends such as wearable tech and other similar innovations for the following reasons:

  • Any safety initiatives that may reduce both the number and severity of claims will thereby reduce the number of claims that need to be litigated.
  • The privacy implications for both employees and employers: When it comes to granting access to individuals’ behavior and health information, law firms need to familiarize themselves with the type and purpose of data being collected as well as the protection of that data.
  • Insurance carriers will continue to evaluate how new technologies might eliminate claims and reduce claims costs.

Wearable tech is still in its infancy as employees need to be convinced that the information collected for the safety of the greater good is worth it. Pilot programs underway may take a year or more before they are actually put into practice in workers’ compensation insurance programs, but proactive insurance defense law firms will want to demonstrate an understanding of these technology trends in order to better serve the needs of insurers and their insureds.