Hiscox UK enhances technology insurance with explicit AI claims coverage

Hiscox UK has launched the update of its insurance for technology businesses to include affirmative cover for artificial intelligence (AI)-related claims. 

The update makes the insurer one of the first in the UK to provide affirmative cover via an explicit and clear insurance clause.

The professional indemnity product includes new wording that provides explicit cover for the AI-related exposures that technology companies increasingly face. 

This coverage ranges from businesses that use AI to complete daily activities to those building AI models for clients or advising on the use of AI tools.  

Adam Atkins, head of technology at Hiscox UK, said: “Insurance will increasingly need to recognise the risks of AI, particularly in sectors like technology where its use is already widespread.

”While the rapid take-up of AI has created considerable opportunity, it also carries additional risks, so we need to be proactive and clear with customers about whether these risks are covered.” 

‘Need for clarity’

Responding to customer feedback, Hiscox is introducing four new clauses for some of the most common loss scenarios.

This includes network security liability to covers claims from cyber attacks affecting client systems, network interruption liability for covering claims from digital disruptions that impact customers, personal data claims for lost or destroyed customer data and injury and property damage for claims where technology fails leading to damage. 

Examples of new wording include covering a customer who relies on the output of AI to deliver on a contract and it goes wrong or a customer who builds an AI model for a client and it does not work to the agreed specification.

Atkins continued: ”This need for clarity is compounded by the UK government’s ambition to accelerate AI adoption.

”As more AI businesses emerge and companies increasingly integrate these tools, the demand for clear and comprehensive cover will only grow.”