According to some estimates, by 2020, the internet of things (IoT) will encompass more than 50 billion devices. But as the technology becomes more common, headlines regarding the risks of IoT-enabled products are becoming more frequent, such as reports that Amazon's digital assistant Alexa "misheard" a toddler's inquiry and proceeded to teach him profanity or cases where autonomous cars have been involved in accidents. Manufacturers of consumer goods, such as wearable fitness devices, baby monitors and "smart" appliances, and businesses like power plants and hospitals should be concerned about the risks associated with the use of such technology as well.

In light of increasing liability concerns, policyholders need to examine their existing insurance policies and consider changes that expand or clarify coverage for possible IoT claims.

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