Unlock the opportunity of AI. Insure the risk.
Artificial intelligence is transforming how businesses operate, make decisions and interact with customers.
But greater reliance on AI creates new risks – from model errors, hallucinations and discrimination to cyber vulnerabilities, intellectual property disputes, financial loss and unintended actions by autonomous AI agents.
Elmore helps businesses understand these emerging exposures and arrange insurance designed around how they develop, deploy and use AI.
AI is changing business risk
AI has moved rapidly from an assistive technology into the operational infrastructure of businesses.
Organisations increasingly use AI to analyse data, write software, communicate with customers, detect fraud, make recommendations and automate business processes.
The next development is autonomous and agentic AI: systems capable of accessing applications, making decisions and completing multi-step tasks with progressively less human intervention.
This creates enormous commercial opportunity – but the risk changes as AI gains greater responsibility.
Traditional Cyber, Professional Indemnity, Technology E&O, Crime and Management Liability policies may respond to some AI-related events. However, emerging AI risks can fall between traditional insurance products or require specifically designed affirmative AI cover.
Elmore helps businesses identify these gaps and build an insurance programme appropriate to their AI exposure.
For businesses developing or supplying AI models, applications, platforms and autonomous agents.
Insurance can help protect against liabilities arising when an AI product does not perform as expected – and can provide customers with greater confidence when adopting the technology.
Typical organisations include:
- AI software developers
- Generative AI platforms
- AI agents and autonomous systems
- SaaS businesses incorporating AI
- RegTech and FinTech providers
- AI cybersecurity businesses
- Machine-learning and analytics providers
For companies implementing third-party or internally developed AI within their operations.
As AI becomes responsible for increasingly important business processes, errors can create direct financial loss, business interruption, regulatory exposure and third-party liabilities.
Relevant uses include:
- Customer service
- Fraud detection
- Financial decision-making
- Software development
- Compliance and monitoring
- Content generation
- Manufacturing and quality control
- Automated transactions
- Autonomous business processes
AI performance failure
Hallucinations and incorrect outputs
Autonomous agent errors
Bias and discrimination
Intellectual property
Privacy and confidential Iinformation
Cyber and AI security
Business interruption and financial loss
How can AI risk be insured?
AI risk does not necessarily sit within one insurance policy.
Elmore can review how AI is being used and identify where traditional and emerging affirmative AI insurance can respond.
AI performance insurance
Protection against financial loss resulting from an AI model failing to perform against agreed metrics or expectations. This can include insurance-backed performance guarantees for AI providers and protection for businesses relying upon AI within critical operations.
AI liability
Protection against third-party claims resulting from the development, provision or use of AI.Potential exposures can include discrimination, hallucinations, privacy violations, intellectual property infringement and other AI-generated liabilities.
AI errors and omissions
Professional Indemnity and Technology E&O protection where an AI-enabled product or service causes a customer financial loss.
AI cyber insurance
Protection against cyber events affecting AI infrastructure, models, data and connected systems, alongside traditional cyber exposures such as data breaches, ransomware and business interruption.
AI financial loss
Protection for businesses deploying AI where model errors, underperformance or autonomous actions result in defined direct financial losses or business interruption.
AI crime and autonomous transactions
Where AI agents interact with payment systems, digital assets or financial infrastructure, appropriate insurance may protect against certain fraud, theft and transaction-related exposures, subject to policy terms.
AI insurance FAQs
What is AI insurance?
AI Insurance is an emerging category of insurance designed to address financial and liability risks created by the development, deployment and use of artificial intelligence.
Depending on the exposure, protection may be provided through affirmative AI insurance or existing Cyber, Professional Indemnity, Technology E&O, Crime, Management Liability and other insurance policies.
Does cyber insurance cover AI?
Sometimes, but not comprehensively.
Cyber insurance may respond where an AI-related loss results from an insured cyber event, data breach or system compromise. However, AI model underperformance, hallucinations, bias or autonomous errors may not constitute a traditional cyber event.
Businesses using AI should therefore review their existing insurance wording rather than assume AI-related losses are automatically covered.
Can the performance of an AI model be insured?
Potentially, yes.
Specialist insurance markets are developing solutions that can protect against defined AI model underperformance. These can support AI providers offering performance commitments to customers or companies relying on AI for critical internal processes.
Eligibility and coverage depend on the AI model, use case, available performance data and underwriting assessment.
Can AI hallucinations be insured?
Certain specialist AI insurance solutions can address liabilities or financial losses arising from inaccurate or hallucinated AI outputs.
Coverage depends upon the use case, policy wording and nature of the resulting loss.
What about autonomous AI agents?
Agentic AI creates additional exposures because an AI system may be able to access other systems, communicate externally or execute actions with limited human intervention.
Insurance considerations can therefore extend beyond model performance into Cyber, Technology E&O, Crime, financial loss and liability insurance.
What will insurers want to know?
Underwriters may consider:
- What AI systems are being used
- Whether they are internally developed or supplied by third parties
- What data the AI can access
- Whether the AI can take autonomous actions
- Financial or transactional permissions
- Human approval requirements
- Security testing and red teaming
- Logging and monitoring
- Model performance history
- Governance and incident response procedures
Does my existing insurance already cover AI?
Possibly in part.
AI-related losses may trigger existing policies, but many policy wordings were developed before current generative and autonomous AI systems existed.
Elmore can review an existing programme to identify potential overlaps, gaps and areas where affirmative AI cover should be considered.