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Corgi, a new insurance company backed by Y Combinator, is now offering AI liability insurance \u2013 for both the AI companies providing the outputs, and the businesses \u2013 and potentially law firms \u2013 that use those AI tools.<\/p>\n
AL asked CEO, Nico Laqua, about what was covered in terms of AI, especially whether it was both sides of the equation; and AL also noted that the legal world is very interested in this area.<\/p>\n
\u2018Where the liability is, we cover\u2019, he told this site on X. <\/p>\n
And on the subject of legal AI, Laqua added: \u2018Besides insurance, legal is the best use case of AI, IMO. Lots of productivity gains. I\u2019m very excited about everything I\u2019m seeing there and we are heavy users of AI native law firms.\u2019<\/p>\n
So, what are they offering? First, Corgi is a tech startup itself, as well as an insurance company. They\u2019ve recently raised $108m. It\u2019s also got a strong focus on tech startups in general, of all shapes and sizes. However, it\u2019s their insurance coverage for AI issues in particular that is likely to get the most interest from the legal world.<\/p>\n
It seems that what they offer is evolving rapidly \u2013 and yesterday\u2019s announcement included mentions of insuring against agents going wrong. But, as far as AL can see at the moment, one policy that directly covers AI, that is listed on their website, is this one:<\/p>\n
AI and Algorithmic Liability Endorsement (CORG-TECH-0038)<\/p>\n
\u2018A modular endorsement for companies using AI, machine learning, or automated decision-making. You select the modules you need \u2014 each with its own limit and retention.<\/p>\n
Available modules include:<\/p>\n
algorithmic bias liability,<\/p>\n
AI hallucination\/defamation,<\/p>\n
training-data misuse,<\/p>\n
data poisoning\/adversarial attacks,<\/p>\n
autonomous-AI bodily injury, deepfake and synthetic media,<\/p>\n
service interruption,<\/p>\n
AI intellectual property,<\/p>\n
regulatory investigation defense, and civil fines (where insurable).<\/p>\n
For example: your AI lending engine is accused of discriminatory credit decisions (Algorithmic Bias module). [Endorsement required \u2014 coverage applies only to selected modules].\u2019<\/p>\n
Elsewhere the Corgi website notes that: \u2018Tech & AI Liability is a specific evolution of professional liability insurance designed for artificial intelligence companies. <\/p>\n
\u2018It covers legal defense and damages if a customer alleges that your AI model, software, or algorithm failed to perform as intended and caused them a financial loss. Corgi explicitly covers three AI risk categories: model performance & hallucination, algorithmic bias, and training data disputes.\u2019<\/p>\n
Although, it\u2019s not clear if the immediately above connects to the policy AI and Algorithmic Liability Endorsement offering. <\/p>\n
Overall, it feels like Corgi\u2019s offering is rapidly expanding and evolving as new AI aspects come to their attention. <\/p>\n
Important Note: this article is not insurance, legal, or financial advice. The AL news story here is solely an informational article.<\/p>\n
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Is this a big deal?<\/p>\n
Yes. It\u2019s been reported that some major insurance companies don\u2019t want to get involved in AI-related coverage, in part because it\u2019s such a new market space that they don\u2019t know the risks, so want to avoid it.<\/p>\n
Secondly, whenever AL\u2019s founder gives a talk on legal AI, aside from \u2018but how will we train junior lawyers in the future?\u2019, one of the next most popular questions is \u2018can you insure against what these tools do?\u2019 <\/p>\n
As far as AL knows, there is only one legal AI company that specifically offers insurance against its own outputs, and that\u2019s Orbital, in relation to residential property work.<\/p>\n
So, this will be interesting to plenty of law firms, inhouse teams, and legal tech companies.<\/p>\n
One final point: many have suggested that dependent on one\u2019s local rules, anything a law firm sends to a client \u2013 no matter how it\u2019s made \u2013 is the firm\u2019s total responsibility. But, who knows how this position will evolve as \u2018legal AI\u2019 becomes synonymous with the outputs of law firms in general? In fact, some may argue we are already at that point. But, again, talk to your regulators and other experts! <\/p>\n