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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.
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How to opt out of AI chatbot training
Malwarebytes guides users through disabling AI training use of chats in ChatGPT, Perplexity, and Claude after OpenAI's human review program emerged.
404 Media reported that OpenAI's 'Project Lily' hires hundreds of contractors to review ChatGPT prompts, with a 'Privacy Filter' removing personal data and usernames hidden, though user memories summaries can still reveal identifying details. The article provides opt-out steps: ChatGPT Settings > Data Controls > 'Improve the model for everyone' (on by default), Perplexity Settings > Preferences > AI data retention, and Claude Settings > Privacy > 'Help Improve our AI Models'. Opting out does not prevent all human access, which remains allowed for abuse investigation, support, troubleshooting, and legal matters.
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Former Infosys chief’s AI startup nabs another $53M
Hang Ten Systems, founded by ex-Infosys CEO Vishal Sikka, added $53 million to its seed round, bringing total funding to $85 million.
The new round was led by Temasek's early-stage platform Xora with Mayfield participating, closing five weeks after the initial $32 million seed. Founded in May 2026, the Palo Alto startup advises enterprises with over $10 billion in annual revenue on AI strategy and builds production software using its in-house Hobie framework of reusable AI skills. It works with 21 major enterprises including Fresenius Kabi, Saudi Aramco, and Siemens Energy, and plans to expand engineering, consulting, and sales teams.
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