AI Risk Worries Insurers and Businesses Alike
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This article discusses the emerging need for insurance coverage related to the increasing adoption of Artificial Intelligence (AI) by businesses and the associated risks. Insurers are grappling with how to address potential damages caused by AI systems, particularly ‘agentic AI’ which could cause significant harm before human oversight. While some insurers are excluding AI-related risks from traditional policies, others are developing specific AI liability insurance products, driven by rising cyber insurance claims linked to AI-enhanced phishing and operational speedups by attackers. The article highlights the gap between AI adoption and governance frameworks, emphasizing the need for businesses to proactively mitigate these evolving risks.
The cybersecurity landscape is rapidly changing due to the widespread adoption of AI across industries. Businesses are increasingly integrating AI into their operations, leading to a corresponding demand for insurance policies to manage the potential risks associated with these systems. Notably, the rise of ‘agentic AI’ – AI systems capable of autonomous action – is particularly concerning, as these systems could cause significant damage before human intervention can occur. This shift is prompting a fundamental reassessment of traditional insurance models, with insurers struggling to determine how to adequately cover the novel risks posed by AI.
Several factors are contributing to this urgency. Deloitte’s research indicates that 60% of workers now have access to sanctioned AI applications, a significant increase from 40% at the beginning of 2025, and OpenAI reports a 320-fold increase in token usage. Simultaneously, security and governance frameworks are lagging behind, with only 21% of companies having developed mature AI governance models. This disparity creates a vulnerability, as businesses are deploying AI without sufficient safeguards or insurance coverage.
Insurance providers are responding by developing new strategies. Resilience, for example, is seeing increased cyber-insurance claims attributed to attackers leveraging AI for more sophisticated phishing and operational speedups. Munich Re and its HSB subsidiary are offering AI liability insurance, recognizing the potential for AI systems to make mistakes, exhibit bias, or generate harmful content, leading to significant financial losses. The article stresses the importance of clear communication between businesses and insurers to define the scope of coverage, acknowledging the bespoke nature of AI insurance due to the evolving risks.