Business Liability Insurance for Artificial Intelligence (AI) is a relatively new insurance offering that aims to provide coverage to businesses employing AI technologies. This insurance can cover a myriad of potential losses including data breaches, errors or omissions in AI systems, and legal liability claims related to AI use​​. The intricacies of liability can vary depending on how a company utilizes AI in its products or services, making liability sometimes challenging to pinpoint​​.

The rapidly growing use of AI has brought about new types of risks. For example, underfitting or overfitting the data can lead to erroneous AI behavior while the black-box nature of some AI systems can make error identification and rectification challenging. Ethical issues such as bias and misinformation, along with regulatory uncertainties, are also prominent risks associated with AI adoption​​. In practice, businesses employing AI could potentially face significant fines if their AI systems are used illegally. For instance, under certain regulations, companies could be fined up to 6% of their global annual revenue or 30 million euros, whichever is higher, for unlawful AI use​​. AI systems can cause various types of harm including property damage, personal injury, defamation, and invasion of privacy, which are pertinent considerations for liability insurance​​.

Different insurance policies such as Errors & Omissions (E&O), Commercial General Liability (CGL), and Directors & Officers (D&O) policies can provide valuable protection against AI-related claims. Some insurance companies have begun to offer standalone intellectual property insurance to cater to the unique challenges posed by AI technologies​​.

AI liability insurance can be particularly beneficial in mitigating predictable liability risks and uncertainties, aligning the interests of various stakeholders involved, such as patients, physicians, and healthcare organizations in the medical field​​. Some insurance companies like Chubb, AXA XL, Zurich, and Alliance are already offering AI liability insurance policies, indicating a growing recognition within the insurance industry of the unique liability considerations that AI technologies bring to the table​​.

This insurance field is evolving in conjunction with the European Union's proposed Artificial Intelligence Act and other regulatory frameworks, aiming to maintain public trust and potentially mandating AI liability insurance for operators of high-risk AI systems​. It’s likely that the new US AI executive order will add to the growing number of AI insurance offerings.