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Emily Garrison

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U.S. and international businesses are accelerating their use of artificial intelligence (AI)[1] at an unprecedented rate. The second AI Index Report published in December 2018 by a Stanford University-led group concluded that “AI activity is increasing nearly everywhere and technological performance is improving across the board.” The AI Index Report further found that “the number of AI startups has seen exponential growth” and that “[f]rom 2013 to 2017, AI VC [venture capital] funding increased 350%.” Growth in this area will continue and will infiltrate every imaginable industry: from assisting doctors in detecting lung cancer to the use of self-driving trucks to deliver mail, AI is the New Frontier.

As businesses race to implement AI solutions and processes that may improve efficiency and lower costs, AI will also create new and ever-evolving risks. And when a company’s AI fails to perform as expected, or AI is breached or manipulated in a cyberattack, new and thorny questions about how to apportion liability for resulting losses emerge. The question only becomes thornier when it is a company’s supplier, contractor, or service provider that experiences a breach or failure.

It will be difficult to apply traditional tort liability schemes to AI-related loss scenarios, but there is no doubt that AI will change the way we look at the insurability of losses. Nonetheless, for businesses that use, or are considering using, AI, either directly or indirectly, there are concrete steps those companies can take to enhance their insurance and risk management programs to mitigate against the threat of AI-related loss. Although coverage needs vary from company to company and should be assessed on an individual basis, a non-exhaustive list of threshold issues to consider are as follows:Continue Reading Artificial Intelligence: The New Frontier for Assessing Insurance Coverage

Hurricanes Harvey and Irma have brought widespread destruction and extraordinary damage to property that will require a long recovery. Individuals will need substantial relief to replace and repair homes and personal property. This blog provides guidance about insurance and governmental resources available to assist individuals after these Hurricanes and discusses common issues and questions arising…

The New York Department of Financial Services (NYDFS) announced last week a series of measures it plans to take “to help strengthen cyber hacking defenses at insurers.” Those measures include, among other things: regular, targeted assessments of cyber security preparedness at insurance companies; putting forward enhanced regulations requiring institutions to meet heightened standards for cyber security; and considering the ways in which NYDFS can support and encourage the development of the cyber security insurance market. The NYDFS stated that it plans to initiate these measures in the coming weeks and months.
Continue Reading New York Department of Financial Services Announces New Cyber Security Measures Directed at Strengthening Insurers’ Cyber Defenses

Since the President’s February 2013 Executive Order directing the National Institute of Standards and Technology (NIST) to lead the development of a voluntary framework to address and reduce cyber risks, the agencies and stakeholders involved have been exploring whether to tie the February 2014 Framework for Improving Critical Infrastructure Cybersecurity (the NIST Framework) to incentives such as cyberliability insurance. For example, in a Report to the President on Cybersecurity Incentives, the Treasury Department suggested that “[c]yber insurance can promote adoption of stronger security measures” because, among other reasons, “insurers could require policyholders to comply with minimum security standards as a condition of insurance coverage, including adoption of the Framework.”

The Treasury Department held a public meeting on November 6 that included a discussion of developments in the market for cyberliability insurance and the NIST Framework.
Continue Reading As Federal and State Agencies Warn of Increased Cyber Threats, Insurance Incentives for Compliance with NIST Cybersecurity Framework May Be on the Horizon