Artificial intelligence (AI) has become a household name thanks to generative AI systems like Open AI's ChatGPT and Dall-E.
 
Generative AI, powered by deep learning, processes vast data, synthesizes, analyzes, and communicates in human-like tones. It transforms workplace ideation and information handling.
 
But, for all of AI's benefits, there are also drawbacks. As the dust settles from the AI media storm, practical questions remain: how can AI help your organization, what are the risks, and how can you mitigate them?
 
Maximizing AI Success
When adopting AI technology, anticipate data management, setup, and staff training challenges. Assess AI's potential benefits for your business, considering budget allocation for customization and employee training. Seek unbiased consultancy for suitability. Consider AI from various angles:

• Potential harms (e.g., bias, discrimination, and healthcare issues).
• Positive impacts (e.g., crop yield improvement and storm prediction).
• Human concerns (e.g., customer experience, privacy, and consumer choice).

Despite resource-intensive initial phases, AI offers long-term advantages. Ensure thoughtful implementation, addressing cybersecurity, IP protection, and data privacy. Prepare for potential job role changes, establish AI policies, and maintain transparency in its operational use.

AI Risk Exposures and Ways to Insure Them
Since AI is rapidly evolving, insurance for businesses using generative AI is relatively new and complex.
 
As of writing, there is no specific insurance for AI liability...yet. Keep in mind that the liability risks will evolve as AI evolves. At Wedgwood, we do annual coverage reviews to ensure our clients have no coverage gaps. Let us know if you've changed how you perform your operations, especially by integrating AI. You can insure against your risks using layers of insurance. You might already have some of these in place:
 
Insurance options for businesses include:

• Cyber liability: Covers cybercrime costs, such as legal fees and data breach expenses.
• Technology errors and omissions (E&O): Protects tech professionals from negligence claims, suitable for those dealing with AI products.
• Intellectual property: Covers legal expenses for IP infringement cases, important for generative AI content.
• Media liability: Shields against financial harm or emotional distress caused by content, relevant for AI-generated content online.
• General liability: Addresses physical harm claims resulting from AI-operated machines or robots.
• Directors and officers (D&O): Offers legal defense for management teams, crucial for board members.
• Professional liability (E&O): Guards against claims of inadequate work or negligence.
• Employment practices liability (EPLI): Protects against employee lawsuits, including discrimination and wrongful termination claims.
• Supply chain liability: Shields against financial losses due to supply chain disruptions, including AI-related issues.

Ensure your coverage aligns with AI integration in your operations.

Cyber Liability Insurance Challenges
You'll need to ensure the challenges associated with using AI. Our job is understanding the risks associated with AI generally and within your industry. When discussing coverage, be prepared to discuss how you're using AI. We’ll explain risk exposure areas and techniques to correct the risks.
 
You might have more cyber liability than you realize. For example, suppose you don't have a cyber liability or risk response policy. In that case, you may need to correct your risks and plan to qualify for insurance. Implementing strong cybersecurity measures is a prudent move, and it could improve your insurance rates.
 
Be Cautious to Avoid Liability Risks
As AI continues to ramp up, it will affect every industry. Treat AI like you would any new computer tool. Take steps to secure it from cyberattacks and stay vigilant about creating and updating policies for its uses within your business.
 
Questions about AI? Wondering if it’s right for your business? Contact Wedgwood Insurance when you're embarking on an AI-based project at your business. We specialize in providing insurance solutions that safeguard what's most important to you.

About the Author
Jamie Ross is the Marketing & Communications Manager for Wedgwood Insurance and The Magnes Group, two of Canada’s leading independent insurance brokers. After too many years working with some of Canada’s most respected ad agencies, Jamie found his way to insurance in 2017 and has never looked back.
A member of the Insurance Brokers Association of Canada Technology Committee, Jamie strives to drive growth and build success through strategic marketing and communications and improved broker connectivity.