Big Insurance Backs Away From AI Risk and Startups Rush In

Here is an unordered list summarizing the key points of the article on AI and insurance coverage:

Insurers Exclude AI-related Risks: Major insurance companies like Berkshire Hathaway, Chubb, and Travelers have successfully lobbied state regulators to exclude AI-related damages from their general liability policies in many states.
Insurers Introduce Specialized Endorsements: Industry standards organizations have developed new endorsements to cover certain specific types of AI-related damages, but these are optional and need to be specifically attached to coverage.
Expanding Exclusions and Gray Areas: The coverage exclusions impact multiple areas including copyright claims, privacy and data use issues, antitrust claims, discrimination allegations, and securities class actions, creating new uncertainties for businesses.
Cybersecurity Policies Also Affected: Insurers are also capping AI-related losses within cybersecurity policies which affects their coverage even further.
New Market Emerging: To address this gap, specialized firms like Munich Re and startups including Corgi, Armilla, Mayflower Specialty, and Embroker have begun offering standalone AI liability policies with various coverage limits and premiums.
Paradox Within the Industry: Ironically, major insurers are using AI technology internally for claims processing and underwriting while simultaneously creating policies that do not cover AI-related risks.
Advice for Businesses: Businesses are advised to review their policies for existing endorsements, consider additional AI-specific coverage options, improve their internal AI governance, conduct bias testing, and disclose AI usage to minimize exposure.

Insurers recognize the unknown financial impact of AI, implying businesses deploying AI technology bear the current risks until insurers develop a pricing model for this emerging risk.