The Automated Driving Insurance Group, which will be led by trade body the Association of British Insurers (ABI), is assessing the insurance implications of the rise of driverless technology.
The group will examine how the industry as a whole should insure driverless vehicles, and will contribute to government discussions on regulation.
A spokesperson for the ABI told City A.M.: "Insurers are looking at the issues raised by the rising popularity of driverless cars, namely the issue of liability in driverless cars."
The main issue at stake is, if there is an accident involving a driverless car, who is liable – the passenger in the car, or the manufacturer?
"We've seen giant leaps forward in automation to help drivers on the road, from parking to braking, and insurers fully support the advances in driverless technology as it has the potential to improve road safety," the ABI spokesperson continued.