AIG told the Financial Times that, although it had filed generative AI exclusions, it \u201chas no plans to implement them at this time\u201d. Having approval for the exclusions would give the company the option to implement them later.<\/p>\n
WR Berkley and Great American declined to comment. <\/p>\n
Insurers increasingly view AI models\u2019 outputs as too unpredictable and opaque to insure, said Dennis Bertram, head of cyber insurance for Europe at Mosaic. \u201cIt\u2019s too much of a black box.\u201d<\/p>\n
Even Mosaic, a speciality insurer at Lloyd\u2019s of London marketplace which offers cover for some AI-enhanced software, has declined to underwrite risks from large language models such as ChatGPT. <\/p>\n
\u201cNobody knows who\u2019s liable if things go wrong,\u201d said Rajiv Dattani, co-founder of the Artificial Intelligence Underwriting Company, an AI insurance and auditing start-up.<\/p>\n
These moves come amid a growing number of high-profile AI-led mistakes. Wolf River Electric, a solar company, sued Google for defamation and sought at least $110mn in damages, after claiming its AI Overview feature falsely stated the company was being sued by Minnesota\u2019s attorney-general.<\/p>\n
Meanwhile, a tribunal last year ordered Air Canada to honour a discount that its customer service chatbot had made up.<\/p>\n
Last year, UK engineering group Arup lost HK$200mn<\/a> (US$25mn) after fraudsters used a digitally cloned version of a senior manager to order financial transfers during a video conference.<\/p>\n Aon\u2019s head of cyber Kevin Kalinich said the insurance industry<\/a> can afford to pay a $400mn or $500mn loss to one company that deployed agentic AI that delivered incorrect pricing or medical diagnoses. <\/p>\n \u201cWhat they can\u2019t afford is if an AI provider makes a mistake that ends up as a 1,000 or 10,000 losses \u2014 a systemic, correlated, aggregated risk,\u201d he added. <\/p>\n AI hallucinations typically fall outside standard cyber cover, which is triggered by security or privacy breaches. So-called tech \u201cerrors and omissions\u201d policies are more likely to cover AI mistakes, but new carve-outs could narrow the scope of the coverage offered.<\/p>\n Ericson Chan, chief information officer of Zurich Insurance, said when insurers evaluated other tech-driven errors, they could \u201ceasily identify the responsibility\u201d. By contrast, AI risk potentially involves many different parties, including developers, model builders and end users. As a result, the potential market impact of AI-driven risks \u201ccould be exponential\u201d, he said.<\/p>\n Some insurers have moved to clarify legal uncertainty with so-called \u201cendorsements\u201d \u2014 an amendment to a policy \u2014 of AI-related risk. But brokers warn these require close scrutiny because in certain cases this has resulted in less cover. <\/p>\n One endorsement by insurer QBE extended some cover for fines and other penalties under the EU\u2019s AI Act, considered the world\u2019s strictest regime regulating the development of the technology.<\/p>\n Recommended<\/p>\n
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