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Insurers launch cover for losses caused by AI chatbot errors

ft.com

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Re: Insurers launch cover for losses caused by AI chatbot errors

#21

Post by dfxm12 »

jpc0 wrote: post #7
alexriddle wrote: post #5

Earlier quoted context omitted.

Lots of insurance covers these types of situation which are the result of careless acts... Don't take the right safety precautions and burn down a customers house - liability insurance Click on a link in a phishing email and open up your network to a ransomware attack - cyber insurance Forget to lock your door and get burgled - property insurance Write buggy software which leads to a hospital having to suspend operat…

> Forget to lock your door and get burgled - property insurance I’m pretty sure this will be the same for the other insurance you mentioned but for property insurance if you left your front door open you will have a hard time getting the insurance to actually pay out your claim. At least here they require a burglar alarm and they require it to be armed when nobody is on site or they will absolutely decline the claim.…

This sounds like a racket for residential properties. Alarms do nothing to prevent burglary. Where this is a requirement, I'm sure the insurance company gets kick backs from companies that make or install them. Or it's an easy out, designed to make it as hard as possible for people to get any value from their insurance...

Re: Insurers launch cover for losses caused by AI chatbot errors

#22

Post by thallium205 »

conartist6 wrote: post #4

Man I wish I could get insurance like that. "Accountability insurance" You were responsibile for something, say, child care, and you just decided to go for beer and leave the child with an AI. The house burns down, but because you had insurance you are not responsible. You just head along to your next child care job and don't too much worry about it.

Crime Insurance (Criminal Acts) is exactly what this is for - when an employee does something criminal while on the clock and the company is facing liability as a result of their actions.

Re: Insurers launch cover for losses caused by AI chatbot errors

#23

Post by kayodelycaon »

loeber wrote: post #19
omoikane wrote: post #17

Earlier quoted context omitted.

Was it also commonplace to have insurances covering human errors? For example: > A tribunal last year ordered Air Canada to honour a discount that its customer service chatbot had made up. If a human sales representative had made that mistake instead of a chatbot, I wonder if companies will try to recover that cost through insurance. Or perhaps AI insurance won't cover the chatbot for that either?

Yes, this is called Professional Liability or Errors & Omissions insurance. It's an important insurance category, but limited in market size. It's uncommon to have e.g. human sales representatives covered for this, but your doctor, lawyer, accountant, architect, etc. will all carry this kind of insurance.

I worked in this market for a few years. It was fascinating. I still have some ACORD documentation from that. I learned very quickly that standards aren’t. :)

Re: Insurers launch cover for losses caused by AI chatbot errors

#24

Post by imoverclocked »

At best, this screams, “you’re doing it wrong.”

We know this stuff isn’t ready, is easily hacked, is undesirable by consumers… and will fail. Somehow, it’s still more efficient to cover losses and degrade service than to approach the problem differently.

Re: Insurers launch cover for losses caused by AI chatbot errors

#25

Post by em-bee »

loeber wrote: post #14

Insurance tech guy here. This is not the revolutionary new type of insurance that it might look like at first glance. It's an adaptation of already-commonplace insurance products that are limited in their market size. If you're curious about this topic, I've written about it at length: https://loeber.substack.com/p/24-insurance-for-ai-easier-sai...

while i am not a fan of the AI craze, and regardless of what i think of the practices of certain insurers, my first thought was that the current state of AI naturally lends itself for insurance. there is a chance that AI gives you a right or wrong answer. and a lesser chance that a wrong answer will lead to damages. but risk averse users will want to protect themselves. so as long as the income insurers make is higher than the payouts, it's a sound business model.

Re: Insurers launch cover for losses caused by AI chatbot errors

#26

Post by luma »

jpc0 wrote: post #7
alexriddle wrote: post #5

Earlier quoted context omitted.

Lots of insurance covers these types of situation which are the result of careless acts... Don't take the right safety precautions and burn down a customers house - liability insurance Click on a link in a phishing email and open up your network to a ransomware attack - cyber insurance Forget to lock your door and get burgled - property insurance Write buggy software which leads to a hospital having to suspend operat…

> Forget to lock your door and get burgled - property insurance I’m pretty sure this will be the same for the other insurance you mentioned but for property insurance if you left your front door open you will have a hard time getting the insurance to actually pay out your claim. At least here they require a burglar alarm and they require it to be armed when nobody is on site or they will absolutely decline the claim.…

I have no idea who is underwriting your policies but this is absolutely not true with any carrier in the US that I've ever seen. Insurance pretty regularly covers being a dumbass.

Re: Insurers launch cover for losses caused by AI chatbot errors

#27

Post by nickff »

dfxm12 wrote: post #21
jpc0 wrote: post #7

Earlier quoted context omitted.

> Forget to lock your door and get burgled - property insurance I’m pretty sure this will be the same for the other insurance you mentioned but for property insurance if you left your front door open you will have a hard time getting the insurance to actually pay out your claim. At least here they require a burglar alarm and they require it to be armed when nobody is on site or they will absolutely decline the claim.…

This sounds like a racket for residential properties. Alarms do nothing to prevent burglary. Where this is a requirement, I'm sure the insurance company gets kick backs from companies that make or install them. Or it's an easy out, designed to make it as hard as possible for people to get any value from their insurance...

Alarms usually don't prevent burglaries, but they often reduce the amount of theft, as the burglars take what they can do in one trip and leave, rather than comprehensively emptying the building/unit.

Re: Insurers launch cover for losses caused by AI chatbot errors

#28

Post by nickff »

imoverclocked wrote: post #24

At best, this screams, “you’re doing it wrong.” We know this stuff isn’t ready, is easily hacked, is undesirable by consumers… and will fail. Somehow, it’s still more efficient to cover losses and degrade service than to approach the problem differently.

Customer service personnel are expensive to train properly, and often quit very quickly because they are treated very poorly by customers. The alternative to AI customer service is often no customer service (like Google).

Re: Insurers launch cover for losses caused by AI chatbot errors

#29

Post by kjs3 »

loeber wrote: post #19
omoikane wrote: post #17

Earlier quoted context omitted.

Was it also commonplace to have insurances covering human errors? For example: > A tribunal last year ordered Air Canada to honour a discount that its customer service chatbot had made up. If a human sales representative had made that mistake instead of a chatbot, I wonder if companies will try to recover that cost through insurance. Or perhaps AI insurance won't cover the chatbot for that either?

Yes, this is called Professional Liability or Errors & Omissions insurance. It's an important insurance category, but limited in market size. It's uncommon to have e.g. human sales representatives covered for this, but your doctor, lawyer, accountant, architect, etc. will all carry this kind of insurance.

I carried E&O for years as an independent consultant. I fortunately never had to use it, but I have peers whose financial future was probably saved by having it.

Re: Insurers launch cover for losses caused by AI chatbot errors

#30

Post by DonHopkins »

Can consumers get AI insurance that covers eating a pizza with glue on it, or eating a rock?

https://www.forbes.com/sites/jackkelly/2024/05/31/google-ai-...

How about MAGA insurance that covers injecting disinfectant, or eating horse dewormer pills, or voting for tariffs?

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