Earlier quoted context omitted.
This isn't completely new, similar issues came up with search engines and this may be seen as 'transformative'. But there may be issues with models that happily reproduce copyrighted texts in their entirety along with other novel issues like models that hallucinate defamatory things or other such problems. Still, I doubt this particular genie can be stuffed back into the bottle, so we'll probably see a lot of litigat…
I agree it's not an entirely new issue. But it's a little different from search results. Say I use the generative paint brush in photoshop. It reproduces a portion of the copyrighted work. I then use the image on an advertising campaign, other merchandise, or post the final product as my own work. Would I be responsible? Would Adobe? Given that retraining these models is not simple, or cheap, would this be just 'cost…
I suspect you would be held liable, though you would probably have a claim of your own to make against Adobe depending on the nature of the work in question.
"Errors and Ommisions" is a fairly standard name for the type of insurance you are thinking of. Typically, you would get it to cover you / your small business in the event that you, by mistake or minor negligence, caused harm to a client (i.e. a bug that cost them some sales).
I don't know the ins and outs of the insurance too well, but as long as it didn't create something super famous like the Nike swoosh, a genuine mistake through the use of an industry standard tool like Adobe might be covered.