AI is exposing a blind spot in the insurance industry, with many insurers on the hook for risks embedded in policies that were never designed to cover increasingly autonomous AI systems.
A report by the Artificial Intelligence Underwriting Company, co-authored with researchers from Anthropic and OpenAI, says that more than 90 per cent of insurers’ exposure to AI agents sits in “silent” cover embedded in conventional policies, leaving risks largely unpriced and often invisible to insurers themselves. The review says rising litigation reflects a broader shift as risks concerning AI systems move beyond chatbots producing erroneous content to “agents” that take actions. That development may expose businesses to claims ranging from professional negligence, cyber attacks and wrongful death.Some industry executives, such as brokers who represent companies buying insurance, have said such warnings are overdone and form an effort to sell a range of new AI insurance products.
But Rajiv Dattani, co-founder of AIUC, said legal liabilities had become a constraint on wider use of AI by large companies. “Businesses cannot adopt AI unless they know the risk has been quantified and managed,” he said.