The discussions at The Professional Liability Underwriting Society’s 2024 cyber symposium in New York City shed light on the challenges insurers face regarding artificial intelligence (AI) and the lack of clarity surrounding its risks.
Panelists emphasized that while AI is not a new concept, its recent advancements, particularly in generative AI, have raised concerns for underwriters. The absence of established models to assess AI-related risks has hindered insurers’ ability to effectively underwrite these policies.
Key issues include the delineation between cyber and tech errors and omissions (E&O) policies and the subtle distinctions between companies that use technology for their services versus those providing technology services for a fee. Understanding these differences is crucial for accurately assessing risks and determining appropriate coverage.
Additionally, there are questions regarding liability in cases where AI-generated software results in data breaches or unauthorized access. The inability to verify the truth with certainty, particularly in instances of AI-generated audio and video manipulation, poses further challenges for underwriters.
While blockchain technology is seen as a potential solution to verify identities and establish a single source of truth, the insurance industry is still grappling with how to address AI risks comprehensively.
Despite these uncertainties, panelists emphasized the need for insurers to adapt and engage with emerging technologies. Waiting on the sidelines could hinder companies’ ability to obtain necessary insurance coverage and impede technological advancements.
Ultimately, while there are still unanswered questions surrounding AI, insurers may need to take calculated risks and evolve their underwriting practices to keep pace with the rapidly changing technological landscape.
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