focus, that is an obvious risk. If an individual
consumer does it, there’s not much you can do. But
if an employer has authorized use and something
happens, it becomes a serious issue.”
Company-issued glass also can be used to
invade someone’s privacy, as Google Glass is able
to capture real-time facial images and video, and
search and/or post data on that person.
Shawn Ram, technology practice leader at Crystal
& Company in San Francisco, said companies that
engineer and deliver wearable devices such as fitness
wristbands also face exposure.
“If a fitness wristband device is collecting
information on me, it puts me in a position whereby
the company can be broaching privacy-related
concerns,” he said.
The private health data on such devices also puts
the manufacturer at risk if protected data is lost.
“That is a topic that is much discussed, but due
to the current nature of wearables, you won’t find
companies managing the risk like hospitals or large
cloud-based companies,” he said.
PwC’s Rao said regulatory laws are needed. Right
now, he said, it is unclear who owns the data and
who can see the data generated by wearables.
“If a health or life insurance carrier is getting
that data and charging a higher premium, that’s not
what you want,” he said. “It must be used only for
the purposes that have been stated. If insurers start
making use of data to do something else, that’s not
DATA SECURITY CONCERNS
Christine Lyon, a partner in the Palo Alto, Calif.,
law office of Morrison Foerster, said there is concern
that employees may use smart glass to collect and
record proprietary information.
“This is not unique to wearables but it’s another
front that requires attention,” she said. “And the
smaller these devices get, the harder they are to
identify that someone is using one. Also, the smaller
they are, the easier they are to lose.”
She said wearables are similar to BYOD because
a company’s workers may have data on third-party
devices that have not been properly vetted.
Smart glass, she said, is a “different animal”
than other wearables because it is so stealthy in
collecting information — raising questions about
when and how that data is used.
“This is fertile new territory because so much is
unknown right now,” Lyon said.
But, she said, the focus should be more on data
security than litigation at this point.
Companies need to establish policies with
specific rules for the use of wearables, which means
they should see if current policies are broad enough
to cover the risks associated with wearables.
“We haven’t seen any claims or litigation yet
around wearables,” Lyon said. “Employers are
dealing with it on an ad hoc basis for the most part.”
Michele Lange, director of legal technologies
for Kroll Ontrack, a data recovery company based
in Minneapolis, specializes in issues related to
e-discovery and technology’s role in the law.
She said wearables should be included in a
company’s BYOD policies to proactively address issues
such as security of the device data and preservation
While wearable devices are being touted by many
as the next big thing on the consumer computing
front, opinions differ on whether or not gadgets like
smart glass, fitness tracking bracelets and smart
watches will ever match the hype.
Whether or not they succeed in terms of sales
and eventual widespread acceptance, however, legal
and insurance experts believe this latest tech trend
will bring added risk, both for employers whose
workers use wearable tech on the job and for those
who manufacture and — by extension in some
cases — manage those devices.
Much like “bring your own device” (BYOD),
where employees conduct company business on
their personal smart phones and tablets, wearable
technology use requires strong cyber policies to
avoid company exposure.
But wearable technology goes a step farther in
that products such as smart glass (Google Glass is
just one example) bring a new dimension to risks in
such areas as workers’ comp and product liability.
Currently, there are mixed views on wearable
technology’s true impact. On the optimistic side,
according to Statista, an Internet-based statistics
provider in New York City, the global wearable
device market is expected to grow from $5 billion in
2014 to $12.6 billion by 2018.
Tempering that is a 2013 Harris Interactive poll
of 2,577 U.S. adults, where overall opinions seem to
be mixed, with Americans slightly skeptical.
According to the Harris poll, about half of
Americans believe wearable tech is just a fad ( 49
REU TERS/INTS KALNINS
percent) and not likely to become as common as
smartphones (also 49 percent). Roughly one-third
of the respondents ( 35 percent and 37 percent,
While the jury is out on the “stickyness” of
wearable devices, their potential as workplace tools,
for example, is undeniable. However, there exists the
double-edged sword of balancing productivity with
Boston-based Anand Rao, a principal in PwC’s
insurance practice, said that for the insurance
industry, products such as Google Glass can
augment a claims professional’s capability of
“A product like Google Glass can create an
almost a real-time assessment of losses in personal
or commercial lines,” he said. “It could speed up
efficiency. I can definitely see smart glass being used
more in that area.”
PRIVACY PROTECTIONS AT RISK
Yet, while wearable technology may boost
productivity aross several business sectors and
in general areas, such as employee training, risk
exposures are obvious, Rao said.
For example, an employee wearing company-issued Google Glass might become distracted and
cause an accident. Or, they may injure themselves
at work after becoming distracted.
“It’s definitely an issue by causing a distraction
when driving or walking or doing other things,”
he said. “The notion around changing someone’s
The latest technology wave is expected to impact data privacy,
intellectual property, workers’ compensation and product liability.
BY TOM STARNER
RISK & INSURANCE®
Risks of Wearables
• The global wearable device market is expected to
grow to $12.6 billion by 2018.
• Risks include data privacy, intellectual property and
• Companies need to review cyber security policies
to mitigate risks.
WEARABLE TECHNOLOGY such as Google Glass, worn here by developer Maximiliano Firtman, brings new risks to
employers, especially if the devices are provided by the company.
OCTOBER 15, 2014