Extract from Michael Gennaro’s article “Specialty AI Insurance Emerges as Key Tool to Tamp Down Risk”
As artificial intelligence-related incidents multiply and traditional insurance policies increasingly exclude AI-related risks, general counsel should be assessing a new wave of dedicated AI insurance offerings to protect their organizations from growing legal and financial exposure, according to a new report from Gartner.
The research and advisory firm predicted that “death by AI” legal claims—instances where AI is blamed directly or indirectly for causing human deaths—will exceed 2,000 worldwide by the end of 2026, and warned that companies without adequate coverage face significant financial losses and reputational harm.
Affirmative AI insurance—a category of policies designed to cover liabilities excluded from standard business owners’ policies—can address a range of AI-specific risks. According to Gartner, those include financial losses stemming from AI hallucinations or erroneous outputs, legal defense costs and settlements arising from algorithmic bias or discrimination in areas such as hiring or lending, claims of intellectual property or copyright infringement tied to AI training data or generated content, failure to meet contractual performance metrics and large-scale property or physical damage resulting from AI system failures or AI agent misconduct.
