
Insurers Find AI Too Risky to Cover Due to Potential Liabilities
News Summary
Major insurers such as AIG, Great American, and WR Berkley are seeking permission from U.S. regulators to exclude AI-related liabilities from their corporate policies, citing the unpredictable nature of AI models as too risky to insure. This move stems from concerns about the ‘black box’ outputs of AI systems which have previously led to significant financial repercussions. Notable incidents include a $110 million lawsuit against Google’s AI Overview for false accusations, a chatbot error by Air Canada leading to unintentional discounts, and a fraud case involving a digitally cloned executive. Insurers are particularly worried about the systemic risk posed by widespread AI mishaps, which could lead to thousands of simultaneous claims.




