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Ensuring financial lines insurance addresses AI risk: 10 key questions

These ten questions cover some of the most pertinent insurance issues for organisations regarding generative AI use within their business.
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Ensuring your financial lines insurance addresses generative AI risk: 10 key questions

The growing use of generative artificial intelligence (AI) is changing how businesses operate and introducing new risks. As you integrate AI into your business processes, reviewing your insurance policy is an important part of AI risk mitigation.

The following questions cover some of the most pertinent insurance issues for organisations regarding generative AI use within their business.

1. What coverage does your company have for regulatory investigations arising from AI?

The adoption of generative AI can provide numerous benefits, but also brings new risks. As regulators are currently considering how to regulate AI, now is a good time to review with your broker how your directors and officers (D&O), professional indemnity (PI), cyber, and crime policies may respond to any issues raised.

2. Do your policies cover environmental, social, and governance (ESG) related claims that may result from AI use?

The large amounts of energy and water used by AI processing systems may conflict with the stated environmental objectives of an organisation.

3. Could shareholders sue boards for not adopting AI and benefitting from its efficiencies?

Directors and senior level managers may ultimately bear responsibility for a company’s use or non-use of AI in its service offering. For example, if the performance of a company is impaired by their failure to adopt AI, or the AI hallucinates, producing harmful content and causing reputational harm, this could potentially lead to shareholder actions.

4. Do your policies cover intellectual property breaches?

The use of copyrighted material in training data sets and the resulting output from generative AI models could lead to a business infringing on another’s intellectual property. 

5. Will insurers begin inserting AI exclusions into financial lines policies?

While AI exclusions are yet to appear in policies, this is a topic of discussion among insurers who are particularly concerned about a systemic event arising from AI.


For Q&As 6-10 and to learn more, request the full list by completing the form below.

Our people

Alexander Philips

Alexander Phillips

Senior Vice President, Financial Lines

  • United Kingdom

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Sarah Coutts

Advocate, Complex Claims and Disputes Team

  • United Kingdom