When AI Gets It Wrong: Insurance Coverage for False, Defamatory and Infringing AI-Generated Content

Andrew Reidy, Joe Saka and Jennifer Fasulo co-authored the article “When AI Gets It Wrong: Insurance Coverage for False, Defamatory, and Infringing AI-Generated Content” (subscription required) for Daily Journal.

The article begins “Generative artificial intelligence cannot be avoided or ignored, but its risks can be managed. As organizations increasingly deploy Gen AI in marketing, customer interactions and operational decision-making, they are also assuming risk for the outputs those systems generate.

AI systems have already produced statements and content that are false, misleading, defamatory or infringing, exposing companies to a growing range of legal claims. In some cases, AI tools have generated incorrect statements about identifiable individuals. In others, AI systems have produced text, images or other materials that allegedly incorporate copyrighted works or personal data. While such content may result in claims alleging familiar legal theories, the resulting claims raise new questions about who is responsible when the harmful content is generated by an AI system rather than a human actor.

These claims raise an increasingly important question for risk managers and policyholders: which insurance policies respond when liability arises from AI-generated outputs? Existing insurance programs may provide coverage in some circumstances, but insurers are increasingly introducing exclusions and limitations aimed specifically at AI-related risks.”