⚠️AI Risks Surge, Insurance Companies Pull Back
Insurance Companies Backing Away from AI Risks
TL;DR
AI-related harms are growing, but insurers are wary. W. R. Berkley has introduced exclusions in its insurance products, and Verisk/ISO has optional language to exclude AI-related harms. RAND report highlights the need for a common taxonomy to track AI incidents and claims.
AI-related harms are emerging, including incorrect outputs, deepfakes, privacy violations, and more. These issues are creating demand for insurance, but existing insurance lines don't fit. Companies want protection from deploying unreliable AI, but insurers are hesitant. W. R. Berkley has introduced exclusions in its D&O, E&O, and Fiduciary Liability insurance products. Verisk/ISO has optional language to exclude AI-related harms. RAND argues for a common taxonomy to track AI incidents and claims. Businesses keep deploying AI despite uncertainty about coverage. RAND expects AI insurance to move beyond specialty products as risks are understood and priced.
Key Points
RAND report highlights 713 AI incidents from over 6,000 reports, covering misinformation, deepfakes, privacy leaks, and more.
W. R. Berkley has introduced exclusions in D&O, E&O, and Fiduciary Liability insurance products to exclude AI-related harms.
Verisk/ISO introduced optional language for carriers to exclude bodily injury, property damage, and other harms from generative AI.
RAND argues for a common taxonomy to track AI incidents and claims, pushing for clearer AI coverage notices.
RAND expects AI insurance to move beyond specialty products as risks are understood and priced accordingly.
Why It Matters
If you're deploying AI in your business, the lack of clear insurance coverage is a major concern. W. R. Berkley's exclusions and Verisk/ISO's optional language highlight the growing uncertainty. RAND's push for a common taxonomy and clearer coverage notices is crucial for businesses to understand their risks.
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