HARTFORD, Conn., March 18 –Specialty insurer HSB today introduced a new artificial intelligence (AI) liability insurance coverage that protects businesses from lawsuits resulting from the use of AI technologies.
Designed for small and medium-sized companies, HSB AI Liability Insurance can pay for AI-related losses that some General Liability policies exclude, including bodily injury, property damage, and advertising injury for claims stemming from AI-generated advertising, marketing, blogs, and social media.
“All types of businesses are using AI to do things more quickly and efficiently,” said Timothy Zeilman, global head of product ownership for HSB, part of Munich Re Group. “At the same time, the AI transformation brings new legal and financial exposures. Business owners may wonder, am I protected? AI insurance helps remove that uncertainty by filling the gaps in coverage, so businesses can stay ahead of emerging risks.”
Small Businesses Embrace AI, but Worry About the Risks
Increasingly, smaller businesses are relying on AI to boost productivity, reduce costs, and stay competitive by automating routine tasks and analyzing data.
Almost three-quarters (74 percent) of small and medium businesses are using AI programs, according to a survey by HSB, and 91 percent plan to in the future.1
Marketing accounts for most of the AI activity (47 percent), followed by operations (43 percent), research and development (42 percent), and social media (38 percent).
New Insurance Protection for AI Liability Exposures
HSB AI Liability Insurance protects against key exposures for an organization’s use of AI including:
- Liability Due to Bodily Injury for lawsuits alleging a person is injured due to the insured’s use of AI. For example: the coverage may apply if an AI-controlled HVAC system creates condensation on the floor, and a person slips, falls, and is hurt.
- Liability Due to Property Damage for lawsuits claiming that property was damaged due to the insured’s use of AI. One possible situation: an employee of an appliance retailer uses an AI chat bot to generate instructions to install a dishwasher and causes a leak and extensive water damage.
- Personal and Advertising Injury Liability for legal actions claiming the insured’s AI tools violated a person’s right to privacy, slander and libel, or copyright infringement. The unauthorized use of content in a marketing brochure, for instance, or defamatory statements in a blog or social post would be covered.
Pending approval by insurance regulators, the coverage will be added to the business policies of insurance carriers that partner with HSB. HSB does not offer this product directly to businesses.
Visit HSB’s website for more information about HSB AI Liability Insurance.
1 HSB surveyed 1,000 Main Street category businesses, including real estate, manufacturing, professional services, legal, and financial services. Business sizes include microbusinesses (1-10 employees), small businesses (11-50 employees), and medium businesses (51-500 employees).
