What happens when the software everyone is rushing to adopt becomes too risky for anyone to insure? According to an article in the Financial Times, we’re about to find out.
Major insurers, including AIG, Great American and WR Berkley, are seeking permission from U.S. regulators to exclude AI-related liabilities from corporate insurance policies. One underwriter describes the results of AI models to FT as “too big a black box”.
The industry has good reason to be scared, history reminds us. Google’s AI Overview falsely accused a solar company of legal problems, sparking a $110 million lawsuit in March. Last year, Air Canada found itself blocked from honoring a discount invented by its chatbot. And last year, fraudsters used a digitally cloned version of a senior executive to steal $25 million from London-based design engineering firm Arup during a video call that looked entirely real.
What really terrifies insurers isn’t a massive payout; it’s the systemic risk of thousands of simultaneous claims when a widely used AI model intervenes. As one Aon executive said, insurers can handle a $400 million loss for a single company. What they can’t handle is an agentic AI incident that triggers 10,000 casualties at once.
