Rapid AI adoption threatens insurers with coverage gaps and liabilities
AI is growing fast, and it's creating some big headaches for insurance companies.
There have already been cases of rogue agents hacking websites, and AI chatbots have been accused of encouraging suicides and murders, which could lead to billions of dollars in losses and legal trouble.
As more businesses use AI, the need for insurance might outpace what current policies can actually cover, leaving a lot of companies exposed.
Insurers add optional AI exclusions
Most insurers haven't figured out how to handle these new AI risks yet.
Some insurers and policy-form providers, including Verisk's Insurance Services Office, are introducing optional exclusions for AI-related risks, which has people worried about gaps.
While there's excitement about using AI for new types of insurance products, some AI-risk policies are underwritten on the basis of simulation testing.
Actual coverage still falls short compared to the massive risks involved.