Artificial Intelligence: The Next Frontier? 

The presenters emphasized the advancements in AI in virtually every sector, such as self-driving cars, “chatbots” providing investment advice, AI monitoring employee tracking and productivity, AI interpreting radiology results, virtual nursing assistants and the development of prototypes in robot-assisted surgery. The presenters explained that the insurance industry is also seeing advancements through the use of AI in the underwriting process, enhancing speed, quality and efficiency. Along with development of touchless claims which uses AI to report the claim, capture damage, audit and communicate with the insured, Additionally, the industry has seen development of fraud reduction algorithms identifying data patterns flagging fraudulent claims. As the presenters explained, AI is pervasive across industries and rapidly becoming the norm. The presenters agreed that AI applications will continue to grow over the next decade.

The presenters then turned to a discussion regarding legal developments surrounding AI. The significant takeaways from the presentation is that the law relating to AI remains in its infancy and is continually developing. The small number of cases that have sought relief associated with AI concerned plaintiffs pursuing claims under traditional products liability, negligence and intentional tort theories. The scope of implicated parties in these types of lawsuits affects a wide array of industry participants, e.g., software developers, hardware developers, technology providers, distributors, and end users. Ultimately, how courts and legislators will address AI-related losses remains uncertain.

Next, the presenters raised various questions concerning coverage for AI losses under specific insurance products, e.g., CGL, cyber/data privacy, first-party, workers’ compensation, business interruption, errors and omissions, and cyber. The presenters noted unique challenges for underwriting such losses, whether such losses fall within the insuring agreement, the impact of exclusions, and implications for companies that implement their own AI.  

The presenters concluded highlighting that the increased use of AI and its significant growth has put the need for insurance coverage into sharp focus. While the coverage available, claims, and case law is still developing, and there are certainly more questions than answers, the insurance industry will need to adapt to this ever changing landscape of technology.