Most major companies, including Google, Amazon, Microsoft, Uber, and Tesla, have had their artificial intelligence (AI) and machine learning (ML) systems tricked, evaded, or unintentionally misled. Yet despite these high profile failures, most organizations’ leaders are largely unaware of their own risk when creating and using AI and ML technologies. This is not entirely the fault of the businesses. Technical tools to limit and remediate damage have not been built as quickly as ML technology itself, existing cyber insurance generally doesn’t fully cover ML systems, and legal remedies (e.g., copyright, liability, and anti-hacking laws) may not cover such situations. An emerging solution is AI/ML-specific insurance. But who will need it and exactly what it will cover are still open questions.
The Case for AI Insurance
When organizations place machine learning systems at the center of their businesses, they introduce the risk of failures that could lead to a data breach, brand damage, property damage, business interruption, and in some cases, bodily harm. Even when companies are empowered to address AI failure modes, it is important to recognize that it is harder to be the defender than the attacker since the former needs to guard against all possible scenarios, while the latter only needs to find a single weakness to exploit. Enter AI insurance. The authors believe that businesses can expect stringent requirements when AI insurance is introduced to limit the insurance provider’s liability with rates cooling off as the AI insurance market matures. They offer a guide on preparing for the introduction of these insurance plans.