The Intersection of Artificial Intelligence and PI Insurance

Since the start of the year Artificial Intelligence (A.I.) has been making an impact on business and technology communities around the world. Over the weekend, the legal industry was the latest sector to see the potential side effects of this technology.

On May 27, 2023, various media outlets around the world reported on a story concerning a lawyer using ChatGTP, an A.I. Platform, for a legal filing. The lawyer asked ChatGTP to research his case and provide citations to support his argument. The problem, discovered by the judge, is that none of the citations included in the filing actually exist.

Since the start of the year CCW Global has offered a number of opinions on the inherent business risks of using untested, and unregulated A.I. tools in a professional capacity. In fact, when Buzzfeed.com announced it would be using Artificial Intelligence tools for content generation, at CCW Global we argued that it was likely a mistake would be found in that content before too long.

A mistake in a legal filling is going to be far more costly, and more impactful than a mistake in an internet gossip column. But both have the possibility of resulting in a loss. In the case of the lawyer, his clients could claim negligence by the fact that he used, with blind faith, the output of an AI platform in their case.

The lawyer will likely face sanctions from the court for his lack of professionalism (and common sense), but an interesting question will likely arise following the visibility of this new technology.

The Role of Professional Indemnity Insurance with AI

Professional Indemnity Insurance, also known as Errors & Omissions Insurance, is designed to protect professionals against legal costs and claims for damages to third parties due to acts of negligence or malpractice. The integration of Artificial Intelligence into business models is a major trend in the digital operations of contemporary organizations and companies – any business trying to stay ahead of its competitors is (seemingly) investing in this new technology.

As such, the question arises: How will Professional Indemnity insurance adapt to the increasing use of Artificial Intelligence in professional services?

A.I. tools are being used for content generation, customer service, data analysis, and are beginning to touch on every aspect of a company’s operations. 

However, these tools are not without their risks. The use of untested and unregulated AI tools in a professional capacity can lead to costly mistakes, as can immediately be seen in the case of the previously mentioned lawyer.

The Risks of Artificial Intelligence in Professional Services

The use of A.I. in professional services, such as law and medicine, presents unique risks.

In the legal sector, for example, reliance on Artificial Intelligence for case research and citation generation can lead to inaccuracies, as demonstrated by the ChatGTP incident. This can cause financial losses for clients, as well as actual losses of their cases.

In the medical sector, A.I. tools are used to assist in diagnosis and treatment planning. However, errors in A.I. outputs can lead to misdiagnoses and inappropriate treatment plans – leading to patient suffering and possibly even death.

The increasing use of A.I. in professional services necessitates a reevaluation of existing Errors and Omissions insurance products. Insurers need to consider the unique risks associated with emerging A.I. technologies and adjust their policies accordingly. This may involve developing new types of coverage specifically designed for AI-related risks, or including the use of A.I. under existing policy terms.

In addition to this, underwriters may need to work closely with A.I. developers, technology companies, and users, to understand the capabilities and limitations of these tools. This could involve regular reviews of A.I. performance and updates to insurance policies as A.I. technology evolves.

The integration of Artificial Intelligence into professional services, and the associated risks presented to customers, highlights the need for dialogue and collaboration among professionals, insurers, AI developers, and regulators. Open discussions between all sectors can help to identify potential risks, and develop strategies to manage them.

For example, a policy might need to cover claims arising from incorrect advice given by an AI tool. Alternatively, insurers might need to consider how they can support professionals in managing the risks associated with AI, such as providing guidance on best practices for using AI tools responsibly and effectively.

One idea currently being proposed various internet communities is the creation of an Artificial Intelligence registrar – only A.I’s which are licensed through the central registration facility would be approved to be used in a business capacity. Consequently, only A.I.s which were regulated via a central registrar would be eligible for coverage under any type of insurance.

AI and Professional Indemnity Insurance: A New Frontier

Staying with the medical sector; AI has shown promise in the management of chronic diseases, such as diabetes and hypertension.

These conditions require continuous management; often necessitating lifestyle changes that can be challenging for patients to implement and maintain. Artificial Intelligence platforms can provide support to doctors and medical professionals in this area - offering tools for monitoring health indicators, providing reminders, and even offering personalized advice on diet and exercise.

However, the use of AI in this context is not without its challenges. For one, the accuracy and reliability of AI outputs are paramount. Inaccurate or misleading information can lead to harmful decisions and outcomes. Non-A.I. Legal professionals are already calling “Pharma Bro” Martin Shkreli’s DrGupta.Ai a “medical and legal nightmare.”

This then demands that the use of AI be scrutinized in respect to responsibility and liability for consumers. If an AI tool provides incorrect advice that leads to harm, who is responsible? The developer of the AI tool? The healthcare provider that recommended its use? Or the patient for following the advice?

Unfortunately, these questions do not have answers yet. In the case of the lawyer using ChatGTP for his legal arguments, it is highly likely that he will suffer professional sanctions that may have otherwise been covered under a standard malpractice policy.

The Future of A.I. and Professional Insurance

There is a great deal of uncertainty in the future of risk and businesses when it comes to the impact of emerging technologies. Unproven tools are not well understood, which means that coverage gaps are going to appear for businesses and companies which may have otherwise assumed that they were protected under existing forms of insurance. Navigating the new business landscape created by the emergence of artificial intelligence can be difficult without considering the impact of these tools on your own company.

CCW Global is an expert in helping businesses find the right insurance for their needs. We offer comprehensive digital risk solutions, and are working with insurance underwriters on the leading edge of product innovation to ensure that our clients are covered no matter what happens.

If you have any questions about the risks your business faces in relation to Artificial Intelligence products, or if you would like to learn more about the digital business insurance solutions we work with, please Contact Us today.

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