When AI quietly breaks things, who pays?
Reed Smith partner David Halbreich explains how AI companies can avoid D&O/E&O coverage gaps around mergers, governance warranties, and claims timing.
In an interview, insurance recovery partner David Halbreich of Reed Smith outlines insurance pitfalls for AI companies under claims-made D&O and E&O policies. He highlights 'straddle' claims after mergers that fall between tail coverage and go-forward policies, potentially leaving policyholders with no coverage. He also warns that governance artifacts submitted in insurance applications, such as bias testing records and model cards, can become warranties carriers use to deny claims, and discusses who should answer AI-use questions and how business interruption coverage applies to cloud and compute vendor outages.
- Straddle claims spanning pre- and post-merger conduct can fall through gaps between tail and go-forward D&O policies
- Governance disclosures in applications can become warranties or conditions precedent used to deny claims
- Companies need internal processes to answer AI-use questions accurately across product teams
- Vendors
- Reed Smith
- Organizations
- Reed Smith
From the original article
9 min read at helpnetsecurity.com
David Halbreich, an insurance recovery partner at Reed Smith , breaks down how AI companies should handle coverage gaps that come up as the industry grows.
By @helpnetsecurity · helpnetsecurity.com
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