AI is too risky to insure, say people whose job is insuring risk

Posted: What happens when the software that everyone’s racing to adopt becomes too risky for anyone to insure? According toreporting from the Financial Times, we’re about to find out. Major insurers including Great American, Chubb, and W. R. Berkley are asking U.S. regulators for permission to exclude widespread AI-related liabilities from corporate policies. One underwriter describes the AI models’ outputs to the FT as “too much of a black box.” AIG, also listed in the FT story, has since sent TechCrunch the following statement: “AIG was not specifically seeking to use these [reported upon] exclusions and has no plans to implement them at this time.” The industry has good reason to be spooked, the story reminds us. Google’s AI Overview falsely accused a solar company of legal troubles, triggering a$110 millionlawsuit back in March. Air Canada last year got stuck honoring a discount itschatbot invented. And fraudsters last year used a digitally cloned version of a senior executive to steal$25 millionfrom the London-based design engineering firm Arup during a video call that seemed entirely real. What really terrifies insurers isn’t one massive payout; it’s the systemic risk of thousands of simultaneous claims when a widely used AI model steps in it. As one Aon executive put it, insurers can handle a $400 million loss to one company. What they can’t handle is an agentic AI mishap that triggers 10,000 losses at once. Topics StrictlyVC concludes its 2025 series with an exclusive event featuring insights from leading VCs and builders such as Pat Gelsinger, Mina Fahmi, and more. Plus, opportunities to forge meaningful connections. Subscribe for the industry’s biggest tech news Every weekday and Sunday, you can get the best of TechCrunch’s coverage. TechCrunch Mobility is your destination for transportation news and insight. Startups are the core of TechCrunch, so get our best coverage delivered weekly. Provides movers and shakers with the info they need to start their day. By submitting your email, you agree to ourTermsandPrivacy Notice.