What happens when the software everyone is rushing to adopt becomes too risky for anyone to insure? according to Reporting from the Financial TimesWe’re about to find out.
Major insurers including AIG, Great American and WR Berkley are seeking permission from US regulators to exclude AI-related liabilities from corporate policies. One underwriter described the output of the AI model in the FT as “pretty much a black box”.
The industry has good reason to be afraid, this story reminds us. Google’s AI observation falsely accused a solar company of legal troubles, leading to a situation $110 million The lawsuit returned in March. Air Canada was stuck honoring the exemption last year chatbot was inventedAnd fraudsters used a digitally cloned version of a senior executive to commit theft last year $25 million What seemed completely surreal was during a video call with London-based design engineering firm Arup.
What really scares insurers isn’t a big payout; This is a systemic risk of thousands of claims being made at once when a widely used AI model steps in. As one Aon executive said, insurers could handle a $400 million loss to a company. What they can’t handle is an agentic AI crash that causes 10,000 damage at once.
