Insurance for Artificial Intelligence Risks

There are Artificial Intelligence risks, some of which are discovered on a daily basis.

The first AI lawsuits have primarily alleged invasion of privacy, copyright infringement, and defamation claims. It is predicted that the next wave of lawsuits will likely involve a different set of risks. The use of generative AI by cybercriminals, for example, is expected to lead to a significant increase in highly sophisticated cyberattacks. The use of generative AI in the healthcare sector is expected to lead to privacy litigation and regulatory enforcement actions.

Cyber Insurance 

Cyber insurance policies generally provide coverage for first-party losses and third-party liabilities arising out of cyber incidents like network security events, data breaches, and ransomware attacks; however, many cyber policies also provide coverage for lesser-known exposures like regulatory liability and media liability that could prove important in our new world. 

Cyber policies typically exclude coverage for contractual liability, but some cyber policies have exceptions for certain contractual liabilities, while other cyber policies expressly provide coverage for liability assumed by contract. It is important to carefully review the existing policy or any new one issued. 

Technology Errors and Omissions Insurance 

Technology errors and omissions (Tech E&O) insurance policies provide coverage for third-party claims that allege a wrongful act, error, or omission in the performance of technology services or the failure of a technology product to perform as intended. 

General Liability Insurance 

Commercial General Liability (CGL) insurance policies generally provide coverage for third-party claims that allege bodily injury or property damage. These policies often exclude coverage for professional liability claims. Again, it is important to review any policy. 

The Future of Insurance for Artificial Intelligence Risks 

It is too early to predict how insurers will respond to the new opportunities and risks posed by AI. Insurers may simply ask more questions about a prospective policyholder's use of AI during the underwriting process. Policies may be different year to year and from company to company.


This document is designed for general information only. The information presented in this document should not be construed to be formal legal or tax advice nor the formation of a lawyer/client relationship. 

For more information on this and other topics, please contact Kevin via any of the channels listed below:

📧 kevin@kmckernan.com  | 📞 718-317-5007

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