Insurance companies don't want to pick up the tabs on AI slop and dangerous chatbot errors.
These LLM products are so risky and potentially dangerous that even the insurance industry won't touch the liability.
Government regulation is not only lacking when it comes to AI harms and lack of guardrails, but Donald Trump has been trying to stop any and all regulation of AI. The insurance industry insures doctors for malpractice, supercars and motorcyclists, and extreme sports sponsored by Redbull. And yet they want to be able to just put total exclusions specifically on AI related errors. And that would be a broad exclusion that will likely be abused too. Especially since there’s often not very well defined definitions of these tech tools. AI is…
But it’s not surprising insurance doesn’t want to cover the errors with all the evidence that these chatbots make errors a lot. No bank or company on earth would use a calculator that was wrong even 5% of the time, and chatbots are wrong maybe 40% of the time or more, and they’re shoving this software into everything nowadays. I think right now most are still in the bezzle time where people may be noticing errors and problems but not quite knowing that it’s attributable to “AI” tech. But anyone with any sense of how this technology works (or doesn’t actually) is realizing that more lawsuits have to be baked in by now.
BARRON’S - Some Insurers Don’t Want to Cover AI’s Errors By Bill Alpert Updated Nov 24, 2025, 5:39 pm EST / Original Nov 24, 2025, 2:35 pm EST Insurers are introducing exclusions for artificial intelligence in new policies, fearing liability from generative AI errors.
I’m reminded of when insurance refused to cover covid, most performers cancellation insurance for example had covid exclusions. So then all the bands and musicians with their big tours would cancel for unspecified “cold” or would come up with some other explanation of illness or whatever, they just stopped testing for covid, in order to be able to claim their insurance. Not very good for society nor for their own personal healthcare frankly.
Just the medical mistakes likely happening already because of these “AI” tools being used by healthcare providers, because these tools do not follow sensible guidelines, in fact people brag that they won’t, and they’re being used to generate notes that may contain dangerous errors or just a plethora of inaccuracies.
I’m sure all these tech companies are lobbying politicians to get liability shields, just like they did for nursing homes killing people with recklessness with covid.
I’m not sure where this goes with AI, but the fallout is going to be bad for somebody. And if politicians and their industry backers get their way, it will be ordinary people who pay the price, just like prior financial crashes I’ve lived through.
Major Insurers Want Out of AI Coverage as ‘Black Box’ Risk Grows AIG, Great American, WR Berkley seek regulatory approval to exclude AI liability by The Tech Buzz PUBLISHED: Sun, Nov 23, 2025, 1:04 PM EST | UPDATED: Sun, Nov 30, 2025, 12:18 AM EST The insurance industry is essentially admitting defeat on artificial intelligence. Major carriers including AIG, Great American, and WR Berkley are petitioning U.S. regulators for permission to exclude AI-related liabilities from corporate policies, citing the technology’s unpredictable nature as an uninsurable risk. The move signals a fundamental crisis of confidence in AI’s enterprise readiness. What happens when the people whose entire business is calculating risk decide something is too dangerous to touch? We’re about to find out.
My letter to reps:
Insurance companies cannot be allowed to exclude AI errors from coverage because the language around this is so broad they would basically make insurance useless because they’re putting automation into everything and calling it “AI”. The insurance companies actually need to be forced to cover AI errors in ALL policies, and price that coverage accordingly, and tech companies need to specifically insure themselves to make people whole when their shoddy AI tech chatbots or automated tools do harm or make errors. Healthcare companies and healthcare providers especially need to be forced to have AI errors covered, with making sure there are massive payouts to patients and survivors when these products go haywire and cause harms or deaths. We need legislation that will hold the feet to the fire to these industries, including jail time for executives that allow AI chatbots and LLM technology to cause errors and harms to consumers, patients, workers, and the environment.
Please feel free to copy or repurpose for your own letters to reps.
WE CANNOT PUSSYFOOT AROUND WITH THIS STUFF.
It’s really imperative to get through to politicians that they can’t just take the money from this industry and listen to the sweet nothings of their lobbyists without consequences from constituents.