HSB, a specialty insurer and part of Munich Re, has introduced a new liability insurance coverage that protects businesses from lawsuits arising from the use of artificial intelligence (AI) technologies.
The AI Liability Insurance is designed for small and medium-sized companies, which increasingly rely on AI to boost productivity, reduce costs, and stay competitive by automating routine tasks and analysing data.
The insurance covers AI-related losses that some General Liability policies exclude, including bodily injury, property damage, and advertising injury for claims stemming from AI-generated advertising, marketing, blogs, and social media.
“All types of businesses are using AI to do things more quickly and efficiently,” said Timothy Zeilman, global head of product ownership at HSB. “At the same time, the AI transformation brings new legal and financial exposures. Business owners may wonder, am I protected? AI insurance helps remove that uncertainty by filling the gaps in coverage, so businesses can stay ahead of emerging risks.”
The coverage protects organisations against lawsuits alleging a person is injured due to the insured’s use of AI. For example, it may apply if an AI-controlled HVAC system creates condensation on the floor, and a person slips and gets hurt.
It also covers claims for property damage due to the insured’s use of AI, such as if an employee of an appliance retailer uses an AI chat bot to generate instructions to install a dishwasher and causes a leak and extensive water damage.
Additionally, the policy covers legal actions claiming the insured’s AI tools violated a person’s right to privacy, slander, libel, or copyright infringement. This could include unauthorised use of content in a marketing brochure or defamatory statements in a blog or social media post.
The coverage will be added to the business policies of insurance carriers that partner with HSB, pending approval by insurance regulators.
