Buy Artificial Intelligence Insurance

Artificial Intelligence (AI) insurance is a type of insurance coverage that protects businesses using AI technology against potential losses, such as data breaches, errors or omissions in AI systems, and AI-related legal liability claims. The coverage helps businesses manage the risks associated with AI technology, ensuring they can continue to adopt and use AI with confidence.

The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small artificial intelligence (AI) and machine learning businesses ranges from $57 to $79 per month based on location, application of AI, revenue, claims history and more. Premiums may vary as this is an emerging industry.

The past few years and recent events have proven that ML and AI aren't foolproof systems. The systems are prone to failures, and that can lead to disasters in the real world. AI systems can fail in two primary ways, i.e., unintentionally and intentionally.

Intentional Failures - Intentional failures are adversary attempts designed to subvert the AI system to mine information like private training data, stealing the design of the underlying algorithm, or gaming the AI to get a specific output.

A good instance of this is Tumblr, which announced that it would stop allowing people to upload porn images and takedown porno or explicit content; people who wanted to bypass the filter would do so by coloring the body images green. They often add the face of an owl to trick the AI and ML system.

Unintentional Failures - Usually, this is a failure that happens on its own accord without adversarial tampering. For instance, OpenAI managed to teach an ML system to play a boating game by mainly rewarding actions of receiving a high score.

However, the ML system started to hit the same targets, accruing more points and not finishing the race. It is the cause of unintentional failure which produces the right outcome, but it is practically unsafe for real-world use.

Artificial intelligence insurance is important because when (not if) something goes wrong, the proper coverage will be there to protect your operations from most failures.

Keep in mind cyber insurance doesn't protect against physical damages such as:

• Bodily injuries sustained from self-driving cars.
• Property damage caused by robots.
• Reputational and brand damage caused by failures.

For these instances general liability and other coverages will be needed.

To understand the relationship between traditional cyber insurance and insurance against AI failure, it is important to speak to your artificial intelligence insurance industry experts. However, broadly speaking, cyber insurance and AI failure are considered two separate issues.

That's why cyber insurance broadly covers information security, privacy liability, and business interruption.

AI failures that result in business interruption and breach of private information are covered by most cyber insurance policies available today. However, AI failures that may damage a brand's image, property damage, and bodily harm aren't likely covered with regular cyber insurance.

Cyber Insurance or Cyber Liability Insurance usually covers common failures like:

Model Stealing Attacks - A few years back, OpenAI created an AI system that automatically generated text but didn't disclose the underlying model mainly based on the grounds that the system could be misused to mainly spread disinformation. Researchers were able to recreate the algorithm and then release it, even before OpenAI released the full model.

Now, this is a very good example of how attacks like these could incur brand intellectual property losses and brand damage. However, hypothetically cyber insurance may cover this scenario since there is a breach of information.

Data Leakage - An example of this is that researchers were able to reconstruct faces, just using the name of the person and then access to the facial recognition system. The system was so effective that people could easily use a reconstructed photo to identify a person from a lineup.

If this was happening in real life, cyber insurance would be able to cover this breach of private information, which in the case of this particular instance is private training data.

When you decide to make machine learning systems a part of critical business processes, it introduces the risk of failure, leading to brand damage, data breach, property damage, business interruption, and even bodily harm.

Even when businesses are empowered to address these failure modes, they (businesses) need to recognize that it can be harder to defend against these attacks and attackers since they need to guard against all scenarios.

Though a hacker only needs to find one vulnerability to exploit. How your ML or AL model can be attacked is unknown for the most part until it is attacked.

Insurance companies in this space are very aware of the gap and are trying to reconcile the differences that exist between traditional software attack insurance and those against machine learning systems.

That's why cyber insurance is amongst the fastest growing insurance market that targets small and medium-sized businesses. Also, insurers want to maintain the momentum.

Since AI adoption has over the years more than tripled in the last 3 years, insurance providers recognize it as a huge market. Many insurance companies are in the process of formulating AI frameworks.

Countries are also considering various AI strategies emphasizing safety, privacy, and security of the ML systems, all of this can and will lead to regulations & requirements of artificial intelligence insurance in the near future.

Here are spme reasons why artificial intelligence (AI) companies might be sued:

Intellectual Property Infringement: AI companies may face lawsuits for alleged infringement of intellectual property rights, such as patents, copyrights, or trademarks. Insurance coverage, such as intellectual property liability insurance, can help protect AI companies by providing financial assistance to defend against such claims and pay for damages or settlements if found liable.

Data Breach or Privacy Violation: AI companies deal with vast amounts of data, and a data breach or privacy violation can result in legal claims from affected parties. Cyber liability insurance can provide coverage for legal costs, notification expenses, and damages associated with data breaches or privacy violations, helping AI companies manage the financial impact of such lawsuits.

Product Liability: AI companies that develop and deploy AI-based products or services may face lawsuits if their products or services cause harm or damage to users or third parties. Product liability insurance can provide coverage for legal defense costs, damages, and settlements, helping AI companies protect themselves against such claims.

Errors and Omissions: Mistakes or errors in AI algorithms or systems could lead to financial losses or other damages for clients or customers. Errors and omissions (E&O) insurance, also known as professional liability insurance, can provide coverage for legal defense costs, damages, and settlements in case of alleged professional negligence, errors, or mistakes in the performance of AI services.

Breach of Contract: AI companies may face lawsuits related to breach of contract claims, such as failure to deliver promised AI solutions or services, or not meeting performance expectations. Commercial general liability (CGL) insurance can provide coverage for legal defense costs, damages, and settlements related to breach of contract claims, depending on the policy's terms and conditions.

Employment Practices Liability: AI companies may face lawsuits related to employment practices, such as wrongful termination, discrimination, or harassment claims from employees or job applicants. Employment practices liability insurance (EPLI) can provide coverage for legal defense costs, damages, and settlements associated with such claims, helping AI companies manage the financial risks of employment-related lawsuits.

In each of these examples, insurance can play a crucial role in protecting AI companies by providing financial assistance to cover legal defense costs, damages, and settlements, which can help mitigate the financial impact of lawsuits. However, it's important to note that insurance policies have terms, conditions, and limits, and coverage may vary depending on the specific policy and circumstances. Therefore, it's crucial for AI companies to carefully review and understand their insurance policies and work with qualified insurance professionals to ensure they have appropriate coverage tailored to their unique needs and risks.