INSURANCE COVERAGE FOR GENERATIVE AI RISKS
Whether with open embrace, reluctance or something in between, virtually every company in any industry must now address the uses and impact of generative artificial intelligence (GenAI) on their operations. Opportunities for GenAI uses are wide-ranging, from coding to virtual assistants, content generation for everything from advertising to art, to roundtable brainstorming or feedback based on distinct roles and personalities.
Of course, such use of GenAI – whether directly or through third-party vendors – also presents unprecedented risks of liability or failure. From 2014 to the present, the number of AI-related lawsuits has increased sevenfold. And where there are risks, insurance coverage and risk management issues naturally follow.
While we are not yet seeing many insurance policy terms or products specific to GenAI risks, policyholders should be reviewing their current traditional insurance programmes to evaluate how their policy terms may fit (or not) the ways that GenAI is being used in or impacting their operations. While policyholders may first think of cyber insurance in connection with GenAI, that is only one of the traditional insurance programmes that may be impacted by such programmes.
Professional liability and errors and omissions insurance
As has become well known, current GenAI models may create erroneous or ‘hallucinatory’ outputs that lack a factual basis – and may even justify their output with additional fabricated sources. For example, several attorneys have already learned this lesson the hard way when they have filed briefs citing non-existent legal authorities provided by ChatGPT, resulting in public sanctions.
Oct-Dec 2024 Issue
Pillsbury Winthrop Shaw Pittman LLP