(Image source: Counterpart website.)
Counterpart (Los Angeles) has expanded its Affirmative Artificial Intelligence Coverage and added a Technology Errors & Omissions Insuring Agreement to its Miscellaneous Professional Liability and Allied Health products. The move aims to address growing gaps in liability coverage stemming from AI-related risks.
Ommid C. Farashahi, Insurance Coverage Partner, BatesCarey LLP.
The company says adoption of AI among small businesses has surged, with 92 percent now using the technology for functions such as marketing, customer service, and research. As automated decision-making tools become more integrated into business operations, insurers have increasingly added exclusions for AI-driven risks, according to research from the Harvard Law School Forum on Corporate Governance.
“AI-related risks are rapidly evolving,” says Ommid C. Farashahi, Insurance Coverage Partner, BatesCarey LLP. “Coverage is by no means guaranteed by traditional E&O, D&O, cyber, and CGL policies, which are ‘silent’ on such exposures and may be mitigated through AI-related exclusions or other policy limitations. To avoid any potential gap in coverage, companies should consider affirmative cover for the concentric circles of AI-related liability.”
Counterpart’s expanded coverage addresses claims stemming from both first- and third-party AI tools. These include errors introduced by generative AI, biased decision-making in hiring processes, and misclassifications resulting from AI-assisted risk assessments.
Mike Muglia, Professional Liability Lead, Counterpart.
Practical Solutions for AI-Related Claims
“AI risks have moved from theory to the courtroom,” says Mike Muglia, Professional Liability Lead, Counterpart. “A lot of small business owners and startup leaders are using AI to work faster, process more information, and deliver a higher level of service, but they don’t always see the liability that comes with it. These endorsements give our brokers practical solutions for claims that come from everyday AI use, whether it’s bad outputs, decision errors, or machine-generated bias.”
Counterpart continues to work with brokers to adapt professional liability coverage to evolving exposures. The company reports more than 28,000 policies placed through 2,800 brokers to date, with expansion across new professions and risk categories underway.