Surge in AI Ushers A “New Silent Cyber” Risk

Could AI herald a “new silent cyber” crisis? The boom of AI has impacted the daily operations of almost every industry and role. But most carriers will not have accounted for the new, highly unfamiliar risks that this technology brings to the table in their pricing and underwriting of policies. This article will explore the policies that are most likely to be affected by the boom of AI tools including patent infringement and intellectual property rights, errors and omissions coverage, professional liability policies, and directors and officers liability coverage. 

Introduction: New Silent Cyber Risk & AI

Seasoned insurance professionals will remember all too well that, not too long ago, underwriters were blindsided by a similar phenomenon. As cyberattacks increased in severity and frequency and the issue of cyber risk became a key concern, carriers faced growing numbers of claims made on non-cyber insurance policies that had not explicitly excluded or included coverage of cyber-related incidents. This lack of clarity came to be known as ‘silent cyber’ or non-affirmative coverage. Similarly, because generative AI is so new, a discrepancy between what is happening and what underwriters are including in insurance policies has arisen. This could lead to, not only a new “silent” risk, but increased chances of coverage overlap too.