Does use of AI have any risk or insurance implications for my business?
From a risk perspective, AI is playing a significant role in changing risk appetite, both positively and negatively. From a positive perspective, businesses are utilising AI to complete, or check, tasks that would be otherwise subject to human error, providing efficiency and improved data from which to build an audit and governance framework. Conversely, we have seen instances of overreliance on AI without human oversight, leading to incorrect or biased outputs, or flawed advice, giving rise to negligence claims, and errors or omissions. We’ve also seen a number or privacy breaches arising from inputting sensitive client data into non-secure LLM’s like ChatGTP.
From an insurance perspective, this is an evolving area that Insurers are asking more questions about, but yet to dictate a clear position on risks arising from AI. We are not yet in the position of seeing exclusions on policies that deal with claims arising from the failures of AI, but we expect these will appear within the next 12 months.
For the time being, businesses are being insured for “the activities of the business”, whether completed by AI or human, and ultimately it is up to the business itself to govern the AI systems to ensure any good or service, or business function performed by the technology, has adequate risk controls in place.
By NSW based Family Business Accredited Advisor
Charles Galayini
GSA Insurance Brokers
