As small and midsize businesses rapidly adopt artificial intelligence tools, new legal and financial risks are emerging, prompting insurers to develop specialized coverage.
Hartford-based specialty insurer HSB said it has introduced an AI liability insurance product aimed at covering exposures that may fall outside traditional general liability policies. The coverage is designed for claims tied to the use of AI, including bodily injury, property damage and advertising-related harms.
The risks stem in part from how companies are deploying AI in day-to-day operations. A recent HSB survey found 74% of small and midsize businesses are already using AI, with 91% planning to adopt it. Common uses include marketing, operations and research.
Those applications can create liability. For example, AI-generated content could trigger defamation or copyright claims, while errors from AI-assisted instructions or automated systems could lead to physical damage or injuries.
The new coverage, which will be offered through partner insurers pending regulatory approval, reflects growing concern that existing policies may not fully address AI-related risks.
